“The Big Idea”

One of the problems dealing with the public in general, is for the most part they are very fickle. They are really not sure of what they want, nor are they sure what it is they are trying to accomplish. They can pick up on some cliche’s, but that is not really what they need or want. They’re afraid to say what they are really looking for, for fear of appearing a fool.  If they were willing and able to convey that feeling to me, well then, I could work on them and bring them back to reality. Well at least I could try. I’m speaking of course of the time when I was in the brokerage business.

What John Q. Public really wants, in my humble opinion, is to be told what to do. Be told what to do and for the advisor to never be wrong, well rarely anyway. Why is it this way? I’m not really sure but I believe it’s because most people do not have the courage of their convictions and are deathly afraid of being wrong. This is where buy and hold comes from.  It’s not that stocks will grow forever and therefore you never want to sell. It’s that you are afraid to make a decision and what we often fail to realize is that no decision – is a decision. You have decided not to decide.

What has always kind of fascinated me though, is how people who seemingly have it together.  That know what they want from the markets what they want from life. Are doing relatively well trading, not setting the world on fire, perhaps, but doing just fine. While not really often but often enough I would see one of these sound, has it together individuals lose it.

Out of the blue, all of a sudden this person will call and sell everything in their portfolio, take all the proceeds and put it into one issue or even options. You know the results – bust!  What happened? Hot tip from a friend or coworker? Rumor? Who knows, it differed in each instance and I can only speculate what it might be.  I always wanted to ask and delve into the matter more but perhaps at the time felt it was inappropriate of me or perhaps I wouldn’t get an honest answer. I did not want the customer to feel as if I was rubbing this huge mistake in his/her face.

When these “Big Ideas” came to me from clients, I coul only surmise that something major was happening in their lives. Perhaps it was trouble or sickness at home although more likely they hated their job so, that they thought this idea was going to free them once and for all.  I really don’t know. However the lesson here is simply that if something big is going on in your life the stock market will not make it disappear, in fact if your not careful it could make things a lot worse. It’s one thing to take a larger than normal risk but don’t do it for the wrong reasons.

On the positive side of this little dissertation, when I was an engineer at Kodak back in the late 60’s, I did hear about an engineer who made a huge score in the futures markets, half million dollars as I recall. Remember this was in the 60’s big money. The story goes, he came in with a briefcase filled with cash, walked into his bosses office, opened the briefcase and told him where to go 😎 And its stories like that, that keep the impossible dream alive and well.

Talking Points and Do Investors Underestimate the Fed on Rate Hikes?:

Top Holdings of Four All-Weather Ultimate Stock-Pickers (Morningstar)
Deregulation Won’t Boost Entrepreneurship (HBR)
Home Country Bias and the Spurs (Robert Seawright)
Formula for Market Extremes (John Hussman)
Why we are in this mess (Money Illusion)
Commercial Real Estate Didn’t Boom and Bust. Is This Why? (Businessweek)
What the gospel of innovation gets wrong. (New Yorker)
How some active fund managers are beating the indexes (MarketWatch)
The Cloudy View of Stocks from 30,000 Feet (Barron’s)
Why Stock Buybacks Are Losing Their Fizz (MarketWatch
Study Asserts Startling Numbers of Insider Trading Rogues (DealBook)
The Peril of Whistleblowing on Wall St. (ProPublica)
Choose the Right Words in an Argument (HBR)
Is the U.S. military wasting taxpayers’ money in Afghanistan? (CBS News)
Apocalypse Later (Humble Student)
Dr Strobe: the man who stopped time and electrified photography – in pictures (The Guardian)
The Tech Industry’s God Complex Is Getting Out of Control (Salon)
9 Financial Risks Everyone Should Understand (MarketWatch)

Do Investors Underestimate the Fed on Rate Hikes?

Have a Great Day!