Winning With The Dow & Avoiding Morons
Imagine this: 16% on your money. That's right! 16%.
The market gave some of us a nice Christmas gift.
That is the return you could have enjoyed if you own the stocks - or better yet, bought an ETF! - that are in the Dow Jones Index. For the year (2006), the "Dow" as we like to call it, turned in a handsome return of 16%.
To be sure, if you own stocks in general, you probably could not have lost, unless you were a fool and traded in and out of stocks at precisely the wrong time, thereby creating commissions and buying high, and then selling low. (typically, day trading is a loser's game)
I have met a ton of losers this year. Take for example, the guy who was getting over 5% on his cash who decided that it was better to sell out of that and buy Ford which has a dividend yield of oh, 0.00% the last time I checked. Because he is not paying me for advice, I was not going to save him 500bps (5.00%). In the end, by next year, he will be behind inflation. Moron.
Then there was the amateurish degenerate who popped up on a finance forum trying to impress everyone claiming that he makes hundreds of dollars a week simply "buying low" and "selling high" and that this simple strategy has worked "everytime". I told him that if his strategy worked everytime then he ought to be running money for Goldman Sachs and Jay-Z and typing his comments from his yacht. My point was that he was lying and that buying low and selling high is a moot point. The challenge is finding the exit, which can be different for everyone depending on your objective among other things.
I am not going to torture myself with recalling all of the jackasses that I have encountered over the past year who have made "the big mistake" as it relates to investment decisions, but alas, their names are legion. Moreover, I am sure that wherever I end up New Year's Eve, I will meet someone who, once they learn what I do, will ask the inevitable stupid cocktail question, "what do you think about the Market?" What I think doesn't matter, because if I gave them sound advice they would not take it; if I told them what I thought, they would argue or merely want to give their opinion. But more to the point, my advice is not free, so whether I am sipping a martini or cognac, no piece of trash with a paltry $100k sitting in a money market account is going to pluck my brain for free advice just because we are wearing tuxedos!
The scoreboard reads: 16% - 0% guess what side most investors are on?
The market gave some of us a nice Christmas gift.
That is the return you could have enjoyed if you own the stocks - or better yet, bought an ETF! - that are in the Dow Jones Index. For the year (2006), the "Dow" as we like to call it, turned in a handsome return of 16%.
To be sure, if you own stocks in general, you probably could not have lost, unless you were a fool and traded in and out of stocks at precisely the wrong time, thereby creating commissions and buying high, and then selling low. (typically, day trading is a loser's game)
I have met a ton of losers this year. Take for example, the guy who was getting over 5% on his cash who decided that it was better to sell out of that and buy Ford which has a dividend yield of oh, 0.00% the last time I checked. Because he is not paying me for advice, I was not going to save him 500bps (5.00%). In the end, by next year, he will be behind inflation. Moron.
Then there was the amateurish degenerate who popped up on a finance forum trying to impress everyone claiming that he makes hundreds of dollars a week simply "buying low" and "selling high" and that this simple strategy has worked "everytime". I told him that if his strategy worked everytime then he ought to be running money for Goldman Sachs and Jay-Z and typing his comments from his yacht. My point was that he was lying and that buying low and selling high is a moot point. The challenge is finding the exit, which can be different for everyone depending on your objective among other things.
I am not going to torture myself with recalling all of the jackasses that I have encountered over the past year who have made "the big mistake" as it relates to investment decisions, but alas, their names are legion. Moreover, I am sure that wherever I end up New Year's Eve, I will meet someone who, once they learn what I do, will ask the inevitable stupid cocktail question, "what do you think about the Market?" What I think doesn't matter, because if I gave them sound advice they would not take it; if I told them what I thought, they would argue or merely want to give their opinion. But more to the point, my advice is not free, so whether I am sipping a martini or cognac, no piece of trash with a paltry $100k sitting in a money market account is going to pluck my brain for free advice just because we are wearing tuxedos!
The scoreboard reads: 16% - 0% guess what side most investors are on?
posted by Blueshift2 at
Sunday, December 31, 2006
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