Gyroscopic Investing

I am seeing recent books from old authors touting this or that new investment idea. Their previous advice may have been off the mark, but this time they’ve got it all figured out.  And just think, they are willing to sell you their wisdom for the low price of $12.95 in soft cover or a low monthly subscription fee.

No thanks.

People should be absolutely ruthless when it comes to assessing investment advice. An attitude of guilty until proven innocent will serve them well.

Be ruthless when looking at what an investment guru is saying. Maybe they did change their tune, but what is to say the new tune is right this time either? How did their advice work in the past? Was their economic thinking sound? Did they tell you to do things with your money that in hindsight were very risky? Did they make predictions and how did they turn out? Don’t rely on what they said their predictions were, go back yourself and read what they said and compare it to what actually happened. Be ruthless about the accuracy.

Also, don’t be lulled into “Aw, schucks…”? apologies about how off they were before and how much they’ve learned their lesson. Those kinds of statements don’t get your money back. Early in my investing career I learned this lesson the hard way. Following a popular investment guru cost me money that didn’t need to be lost. I wasn’t ruthless enough in questioning the advice I was getting. I am now.

Investing is not a popularity contest and investors are not graded lower for coming off like a skeptical jerk. Be a jerk. Be ruthless. Question everything a guru says and why they are saying it. Make them prove what they are saying is true – Every last word of it.

Investors that are ruthless in assessing where to put their money put the odds in their favor. Unleash the ruthless investing jackass that is deep inside of you. You’ll be better off for it.

Thinking for yourself is always safer.  Or, at least better.  At least in my opinion.  Maybe there are others who are smarter than me who could do my thinking better.  Maybe they would, in fact, make better decisions.  Scratch that, there are definitely others in this world who are smarter than me, and I don't even have to look very far to find them.

But nevertheless, thinking is just one thing I don't believe ought to be out-sourced.  Think for yourself.  Don't blindly trust.  Thanks, Craig.

Good advice.

As I hold the permanent portfolio longer, I realize that professional financial advice is not necessary. If we follow this idea it becomes buy low, sell high and it's all automated by your rebalancing bands. Even better that index ETFs with low MERs are advocated.

I followed  silver bullion and gold mining stock gurus for years and none of them got it right. Prices kept falling and falling and falling.... Even when something is down 90% it could still lose 50% from what you think is the bottom and possibly more quite easily.  Thankfully I never paid any of them a cent, and I made my own decisions to chicken out of those markets long ago, and thankfully the losses were small. 

Consider the news, business channels, podcasts, youtube interviews  nothing more than entertainment

Well said Craig.  This also applies to co-workers, family, and friends as well.  Bull markets, such as the past five years, give a false sense of security.  My wife and I just returned from our company's Christmas party and you would swear that everyone's Warren Buffett, which is amazing because I'm in the telecommunications career field.   

Investing, for me, has become something akin to religion and politics.  I stopped talking about the subject with people due to the fact that I was called a jerk/jackass (not literally but this is what the people were thinking) several times for questioning someone's investment philosophy.

FWIW, when people at work start talking about the stock market at Christmas parties and the water cooler that usually signals the party is about to end.  The good thing is, I don't have to worry about what the stock market is going to do as a long term Permanent Portfolio investor.  Quite liberating...