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It's a loser's game. Written by James Altucher. ("James Altucher is a successful entrepreneur, chess master, investor and writer. He has started and run more than 20 companies, and sold several of those businesses for large exits.")
I probably shouldn't do the "quick, first impression"; but my initial reaction to his write is that it is going to be part of a skit on Saturday Night Live.
My second thought is that if he is serious, he doesn't understand much about folks (small investors) outside of his own world of "people".
I am reminded of a conversation I happen to catch several years ago on one of the talking heads programs, regarding Walmart and their numbers and such. Near the end of this talk and having presented all of the numbers and thoughts about the good and bad; the "person" was asked when was their last visit to a Walmart to assess other aspects of a typical store. Answer: "I've never been at a Walmart." Kinda took the value away from a lot of the assessment provided with just some numbers.
I will agree that if one does not know what the hell they are doing; individual stocks can be a rough ride.
However, folks who are good enough with their money to have remaining sums to invest are likely best suited to broadbased mutual funds. Diversify as you choose. But, it is not necessary to be spread too wide to have a decent long term return.
Well, enough from me about this article. I did send him an email noting that I no longer needed his service as an advisor.
I think most investors suck at it and are their own worst enemy (myself included) - there are many reasons - non of which we can change. Back in the day - I loved interest paying things - bonds, CDs. When I got into stock mutual funds I screwed myself - I began to overthink everything.
The truth is most investors can't handle volatility so the ideal products for them are balanced funds that smooth out the ride. I've seen studies indicating that investor returns most closely match the fund's returns in the balanced fund category.
@MFOMembers: The loser is James Altucher!!!! LB is correct that most investers can stand volatility, that's why the have sub-standard returns. They confuse volatility with risk, there not the same. Regards, Ted
I agree with LB & Ted. Just watch, right here on MFO, at the next market major downswing. Some of us will be thinking about purchasing at a discount, but others will be cautioning against "catching falling knives".
@OJ, The irony is both those purchasing at a discount and warning against falling knives can be right because everyone's financial circumstance is different. For the poor and middle class riding out the storm during a downturn can be a dangerous thing if you may need your assets invested in stocks at some point soon in the future. This is why I often find the idea that every American should be dependent on the stock market for their retirement disturbing as so many are living paycheck to paycheck and many of those who have some savings are just one emergency, job loss or medical crisis away from having to liquidate their assets in a hurry. Retirement with stock investments shouldn't be a matter of luck for so many people but unfortunately it is.
Just watch, right here on MFO, at the next market major downswing. Some of us will be thinking about purchasing at a discount, but others will be cautioning against "catching falling knives".
OJ - Actually, 90% will report that they got out "in time" near the top and are safely in cash. (Talk of cash being trash will cease abruptly.)
@MFOMembers: The loser is James Altucher!!!! LB is correct that most investers can stand volatility, that's why the have sub-standard returns. They confuse volatility with risk, there not the same. Regards, Ted
I agree with Ted. Altucher is a deeply annoying douche.
Comments
Thanks for the story link.
I probably shouldn't do the "quick, first impression"; but my initial reaction to his write is that it is going to be part of a skit on Saturday Night Live.
My second thought is that if he is serious, he doesn't understand much about folks (small investors) outside of his own world of "people".
I am reminded of a conversation I happen to catch several years ago on one of the talking heads programs, regarding Walmart and their numbers and such. Near the end of this talk and having presented all of the numbers and thoughts about the good and bad; the "person" was asked when was their last visit to a Walmart to assess other aspects of a typical store. Answer: "I've never been at a Walmart." Kinda took the value away from a lot of the assessment provided with just some numbers.
I will agree that if one does not know what the hell they are doing; individual stocks can be a rough ride.
However, folks who are good enough with their money to have remaining sums to invest are likely best suited to broadbased mutual funds. Diversify as you choose. But, it is not necessary to be spread too wide to have a decent long term return.
Well, enough from me about this article. I did send him an email noting that I no longer needed his service as an advisor.
Take care,
Catch
Altucher has always been a bit out there. He is first and foremost a promoter.
Average Investor 20 Year Return Astoundingly Awful
http://www.thestreet.com/story/11621555/1/average-investor-20-year-return-astoundingly-awful.html
A Study of Real Real Returns
http://www.thornburginvestments.com/pdfs/th1401.pdf
Regards,
Ted
Best Wishes