Blog Posts by Aaron Task

In his investing classic Market Wizards and its sequels, Jack Schwager profiled some of the world's most successful money managers. The books are a monument to the wisdom of certain investors, and how they've been so successful over long careers.

In his new book, Market Sense and Nonsense, Schwager essentially takes the opposite approach --focusing on common mistakes investors make and some commonly held views that are just plain wrong.

Among the most common mistakes and misconceptions:

Momentum Begets Momentum: "Past performance is no indicator of future returns," isn't just a legal disclaimer used by mutual funds; it's also a good rule for investors to live by, says Schwager, who co-manages the ADM Investor Services Diversified Strategies fund. Most investors look at what's worked best in the past 3- or 5-years. But chasing performance "not only doesn't do better than picking darts, you're better off picking what did worse," he says.

'Deficient Market Hypothesis': The financial

Listening to the Sunday morning talk shows this weekend, it appears negotiations over a deal to avoid the fiscal cliff are breaking down. Watching the financial markets this morning and you'll come away with a very different conclusion.

The Dow (DJI) was down a hair in recent trading -- off its early highs -- while the S&P 500 (GSPC) and Nasdaq (IXIC) were marginally higher. In other words, this isn't a market acting like it fears an imminent breakdown of the talks — or the cliff itself, for that matter.

Before looking ahead, a quick recap of the political chatter:

Speaking on Fox News this weekend, House Speaker John Boehner said the talks have gone "nowhere," echoing his comments Friday when he said: "There's a stalemate, let's not kid ourselves."

Speaking for the president (literally and figuratively), Treasury Secretary Tim Geithner declared that Republicans will ultimately give in on their opposition to raising taxes.

"The only thing that stands in the way of a deal right now is

The U.S. economy grew 2.7% in the third quarter, up from a previously reported 2% the government reported Thursday. But the guts of the report raised some concern, notably a big increase in inventories and a big downward revision to consumer spending.

For most economists, the GDP report provides further evidence of a U.S. economy that's growing modestly, but far from robustly. For Lakshman Achuthan, co-founder of the Economic Cycle Research Institute, the report is a distraction from the real story: the U.S. economy is already in recession.

"The evidence is starting to mount a recession is already underway, and we're a few months into it," he says, suggesting the downturn began in July.

A quick recap since Achuthan's calls are often controversial and he would say misunderstood: In September 2011, ECRI predicted a recession was "inescapable" but Achuthan says he was "intentionally ambiguous" about the timing. In December that year, he told Bloomberg that the recession was likely to

Mitt Romney may have lost the election, but his idea to cap deductions has won some support in Washington D.C., including from President Obama.

"I think that there are loopholes that can be closed, and we should look at how we can make the process of deductions, the filing process easier, simpler," the president said on Nov. 14 at his first post-election press conference.

The nonpartisan Tax Policy Center (TPC) estimates that capping tax deductions at $50,000 would raise $749 billion over 10 years, which is serious money even for the federal government. Given Republican opposition to raising tax rates, capping deductions may be key to any deal to resolve the fiscal cliff.

Related: Stocks Slide as Political "Arms Race" Threatens Fiscal Cliff Deal

But the devil is in the details and the housing market particularly could be at risk if any cap applies to mortgage interest deductions. American households took $83 billion in mortgage interest deductions in 2010, The NYT reports, citing the

Updated from 11:50 a.m. EST

Update: A modest sell-off in stocks picked up steam Tuesday afternoon after Sen. Majority Leader Harry Reid (D-NEV.) said he was "disappointed" with the "little progress" being made in negotiations to avoid the fiscal cliff.

"We only have a couple weeks to get something done so we have to get away from the "happy talk" and do "specific things," Reid said, according to wire service reports.

The Dow fell about 60 points in immediate reaction and was recently down 0.6% to 12,891, closed down 0.7% to 12,878, just off its lows of the session; meanwhile, the S&P 500 shed 0.5% to close below the psychologically important 1400 level.

Earlier: Stocks were modestly lower Tuesday despite potential positive catalysts such as the latest Greek bailout, a better-than-expected durable goods report, a spike in consumer confidence and another gain in the Case-Shiller Home Price Index, which hit its highest level since October 2010.

One reason for the lack of enthusiasm:

In recent months, consumer confidence has risen as the unemployment rate has come down and the housing recovery builds momentum. This weekend's strong start to the holiday shopping season is another sign of an economy that's doing much better than feared.

Related: Black Friday Weekend by the Numbers

But the recession never ended for millions of Americans and many of them now face a frightening prospect: the loss of unemployment benefits.

"More than 40% of the nearly five million Americans who receive unemployment insurance are set to lose those benefits if federal programs expire as scheduled at year-end," The WSJ reports. "Already this year, hundreds of thousands of people have exhausted their jobless benefits. Now, virtually everyone left in the federal programs would lose their benefits if the programs expire as scheduled at year-end."

The roughly 2.1 million Americans at risk are currently receiving benefits through federally backed programs that Congress approved starting in

Hewlett-Packard (HPQ) shares tumbled 12% to a 10-year low Tuesday after the company announced a shocking $8.8 billion write-down and dismal quarterly results.

In 2011, HP acquired London's Autonomy for $11 billion in a bid to move deeper into software and services. HP now says it was duped, citing "serious accounting improprieties" in announcing the write-down, of which over $5 billion was related to accounting issues and the rest due to the division's poor performance.

HP's founder Michael Lynch vehemently (and publicly) disputed HP's claim of wrongdoing, leading many observers to wonder whether HP was really the victim of accounting fraud (a word the company notably hasn't used) or is just using these alleged accounting issues as an excuse to mask its poor performance.

"The mind boggles as to where the snafu was," says Barry Ritholtz, CEO of Fusion IQ and author of The Big Picture blog, who notes the accounting industry is once again left with another black eye — and with

When it was released a year ago this month, James Rickards' Currency Wars: The Making of the Next Global Crisis was widely hailed and quickly adopted as a guidebook of sorts for economic conservatives, Fed critics and gold bugs -- especially gold bugs given Rickards' support for a return to the gold standard.

Related: The Next Global Crisis: Currency Wars Have Already Begun, Rickards Says

Since the book's release, the Federal Reserve has tripled-down on its policy of quantitative easing, effectively pledging to keep rates at zero indefinitely — or until the job market dramatically improves. Nevertheless, predictions of the dollar's demise have proven unwarranted, or certainly premature. Among other issues, concerns about Europe's debt crisis have driven global investors into the greenback, rather than fleeing from it as Rickards (among others) predicts.

In the past 12 months, the Dollar Index is up about 3.3% while gold has been largely stuck in the middle of a range between the low