Take the Bait, Ruin Your Investing Life

by Ben Stein

We're currently in very stormy seas investment-wise. There have been dramatic moves downward on every index I know of. The media is filled with tales of gloom and doom.

In such times, we all need advice on how best to ruin our investing lives. With that in mind, try the following:

1. Panic.

That's right, get scared. Get really freaked out. Let the panic mongers on TV sell you on their points of view.

2. Sell everything you have in the market.

Even if it's at a loss. Even if you were doing great with it until now, sell, sell, sell. Get the heck out. Just dump everything and go to cash.

3. Believe that "this time, it's different."

Yes, even though markets always recover, especially in times of aggressive repair work by central banks, believe that this time it's different and this time the market will go down, stay down, and never come back.

This time, alone among postwar markets, the market will never rally, never rebound, never reach new heights. Yes, this time, things are so bad that stocks will never come back, so sell out and stay out.

4. Believe that the short-sellers on TV are sincere.

No, they're not just trying to scare you into selling to knock down the market so they can make money. They're not just ginning up phony metrics to scare you and make money on their shorts. They're really trying to help you.

5. Trust the major newspapers to know more than Warren Buffett.

Yes, Buffett's the best investor in history, and says to stay in the market and buy index funds. He also says now is the time that stupid money is leaving the market.

But pay no attention to that fool! Pay attention only to some new young gunslinger at The Wall Street Journal or Barron's who tells you it's time to sell. Even pay attention when someone with no investing track record tells you to sell out of Berkshire Hathaway, one of the most successful investments of all time.

No, don't trust Buffett or other "geniuses" like John Bogle. Trust whoever comes across as the smartest-aleck and most glib, "on whom assurance sits, as a silk hat on a Bradford millionaire" (to quote T.S. Eliot).

6. Trust that you can get back in before the next big move upward.

You may have heard that you can never know such things, and that if you miss the first huge days of a rally you can never catch up. But in your bones, you'll know when the move is coming and you'll get in just in time.

7. Buy only stocks your friends tip you about.

Don't buy indexes. Don't buy broadly based mutual funds. Just buy individual stocks you've heard about in your gym's locker room.

Unhappy Endings

I could go on, but you get the point.

None of us is a genius except Buffett. None of us knows when the market will turn. We do know we make more money if we buy when stocks are down. We do know we make more money by patient, ongoing investing.

But pay no attention. After all, your goal is to be old and poor, right? Right! So listen to what the short-sellers are telling you and put all your money under the mattress for 15 years -- you'll be really glad you did.

After all, when did market manipulators ever lie to you? When did slow, patient acquiring of broad indexes ever make a buck? No, believe the slickest guy in the room. And exit crying.

Comments

Post a Comment

Popular posts from this blog

US Quake Test Goes “Horribly Wrong”, Leaves 500,000 Dead In Haiti

By: Sorcha Faal, and as reported to her Western Subscribers A grim report prepared by the Russian Northern Fleet for Prime Minister Putin is stating today that the catastrophic earthquake that has devastated the Island of Haiti was the ‘clear result’ of a United States Navy test of one of its ‘earthquake weapons’ planned to be used by the Americans upon the Persian Nation of Iran but had gone ‘horribly wrong’. The Northern Fleet has been monitoring US Naval movements and activities in the Caribbean since 2008 when the Americans announced their intention to re-establish their Forth Fleet that had been disbanded in 1950, and which was responded to by the Motherland when later that year a Russian flotilla led by nuclear powered cruiser Peter the Great began their first exercises in this region since the ending of the Cold War. Though virtually unknown to the American people, the use, and perfection, of earthquake weapon technology has a decade’s long history that began with the former Sov
Read more

I'm an accountant, I hate my job, but seriously, I wouldn’t know what else to do

I was born to be a lot of things, but being an accountant isn't one of them. In my heart of hearts I have always known this, but for some stupid subconscious reason, I have always ignored it. Why? Well...um...err...I didn’t know what else to do. How many people faced with the same predicament of deciding on a profession upon graduating used “not really knowing what to do” as their guiding compass? Blink. Ten years have passed and you’re left wondering, how did I get here? In this cubicle? Doing something I cannot stand (and I’m not even honestly good at), with people I quite frankly don’t really care about? For me that was accounting, a profession that conjures numerous clichés, such as boring, bean counting, personality not needed, number crunching etc etc. These have now evolved and have been replaced by repetition, reconciliations, long hours, fudging figures, high turnover, Enron and even more reconciliations. R-E-S-P-E-C-T But please don’t get me wrong, I have the utmost respe
Read more

Have We Reached a Top?

By James Kostohryz It's never been my position that the flow of fundamental news would turn from positive to negative overnight and in a total fashion. The world simply doesn't work that way. When I terminated my core long position a couple of weeks ago for reasons explained in�Ten Reasons the Countertrend Rally May Be Over,�I outlined a series of factors I believe may manifest in the later half of 2009 and the first half of 2010. Indeed, most of these factors will be more back-end loaded, as negative factors tend to build on one another and gain momentum in time through the medium of psychology and social mood. It's my view that the flow of economically relevant events�-- and perceptions of these events --are in the early stages of a transition. In this case, a transition means the flow of relatively good news will tend to wane somewhat while there's an uptick in relatively bad news. This is what one would expect at a top. However, it's to be expected that during t
Read more