Do not trust financial market risk models. Despite the predilection of some analysts to model the financial markets using sophisticated mathematics, the markets are governed by behavioral science, not physical science.

The government can indefinitely control both short-term and long-term interest rates.

Value investors should completely exit a security by the time it reaches full value; owning overvalued securities is the realm of speculators.

The way to maximize outcome is to focus on the process.

Most investors are primarily oriented toward return, how much they can make and pay little attention to risk, how much they can lose.

Generally, the greater the stigma or revulsion, the better the bargain.

Financial innovation can be highly dangerous, though almost no one will tell you this. New financial products are typically created for sunny days and are almost never stress-tested for stormy weather. Securitization is an area that almost perfectly fits this description; markets for securitized assets such as subprime mortgages completely collapsed in 2008 and have not fully recovered. Ironically, the government is eager to restore the securitization markets back to their pre-collapse stature.