The Tycoon Report

There Is No Investing God

Thursday, April 9, 2009 | Bob De Dea

"Think wrongly, if you please, but in all cases think for yourself." -- Doris Lessing

Myths die hard. My job today is to drive several nails in the coffin of one relentless myth.

There are dozens of online sites for investing advice, and hundreds of individuals out there hawking their expertise. Some of them are indubitably con men trying to make a fast buck. ("I've got the horse right here -- his name is Paul Revere. And there's a guy that says if the weather's clear, Can do. Can do! This guy says the horse can do.") Others are in fact experts who know what they're talking about. The majority tout a "time-tested," "proven" or otherwise verifiable "system" for screening, weighting and picking securities for the "best" investment opportunities.

Horse-race Gamblers from Guys & Dolls

 

Anyone who has read "The Drunkard's Walk: How Randomness Rules Our Lives"¹ or who has taken even an elementary statistics or probabilities class knows that numbers may not lie, but they often don't tell the whole truth. Results can be fudged, track records can be invented, success rates can be manipulated. All that we have is the hawker's word. Weeding out the scams from the glams and the useful from the merely hopeful can be a full-time vocation.

If you've ever bought a used car, you've more than likely encountered the doubt that follows a declaration like, "She's never had any mechanical problems, even with 150,000 miles on her." Fortunately, a car buyer has recourse to an informed opinion by a qualified mechanic as to the car's present condition and its possible past.

To whom does the puzzled investor turn?

You have a terrific resource right here at your fingertips in The Tycoon Report, where we aim to give it to you straight. Yes, we sell products here, but the information in The Report is good stuff -- sometimes educational, sometimes actionable, but (we hope) always valuable.

The honest truth, however, is that there is no omniscient source for financial advice. No ultimate guru who knows what the market will do tomorrow. No "investing god" exists to provide comfort in times of trouble, to magically erase the despair of your losses and replace it with the joy of gains. There is, in short, no source of infallible advice.

All of the advisers, columnists and Web site investing aficionados are fallible men and women like you and me. For us to invest in them the confidence we lack in ourselves is the height of folly.² The solution, instead, is to build confidence in our own understanding of the market and to bear full responsibility for our financial well-being.
 

 Wall Street Guru Ball

A wise Greek once said, "Know thyself." (Only he said it in Greek.) Each of us, it turns out, is the only god who exists when it comes to our finances -- the only deity to whom we owe obeisance, the only recipient of both praise and prayers, the only one who can make either a heaven or a hell of our investments

So, please, take the time to make a plan. Learn from the best. Adopt or develop a system that works for you (both for who you are and what you want from your financial journey). And be disciplined enough to follow through.

You’ll make mistakes. But they’ll be your mistakes. You’ll learn and grow, and one thing I promise: The things that come from taking your financial health and prosperity into your own hands are the most satisfying blessings of all.

¹ By Leonard Mlodinow
² See "Bernard Madoff"





Bob De Dea
Guest Contributor
The Tycoon Report