Tuesday, November 22, 2011

I Love Financial Advice

I also occasionally give it. I don't like to, but when friends ask, I tell. This is partly because I'm known for doing my own investing and I haven't sucked. But that might be dumb luck. It's hard to tell. I used to watch the investment shows, like Nightly Business Report and Wall Street Week. I still like such shows -- Wall Street Week is long gone -- but I'm wary of advice. Listening to advice from name financial advisers is why I own Nokia, for instance. Nokia! Why?

I like the idea of experts, but that's about where it ends. I think it's better to sort things out without them. I'm actually only talking about financial experts. I've learned a lot from academics on a host of subjects. Some can really be relied upon.

So what can we make of two articles I found on the web this morning?

Very slow growth 2012 then long bear to 2020 -- Commentary: Decade of woe for stocks, time to buy bonds (MarketWatch)

John Paulson: Sell Bonds; Buy Stocks; Double Digit Inflation Coming (Forbes)

The titles say it all! So, what's a guy or gal to do? I just retired, and I'm long on stocks. I'm a buy-and-hold guy, and I like high-yield equities, which is why I never bought high fliers like Apple, Amazon, and Google. Oh well, spilled milk. Get over it.

I did make some good choices and I'm actually up even though I bought a bunch in 2007. 2007! Why'd I do that? Don't ask.

Anyway, I'm long equities, I just retired, so I'm slowly swinging more into bonds. I have to. Everyone says I have to. I believe them. Lousy time to buy bonds, so I'm going slow. But I'm doing it.

Two such contradictory articles in one day -- from reliable sources, too -- make it really crazy to think about this stuff. The thing I do that keeps me from being crazy is to have a long view. Harder when you're older, but you have to. The other thing I do is listen to economists more that market analysts. If I can grok the economy, I can make intelligent choices. I think.

(grok: from Heinlein's Stranger in a Strange Land, a verb, meaning to understand deeply, with little or no distance between the knower and the known) Great word, I use it like it was real.

Okay. The one thing I'll say that resembles advice or, at best, analysis, is that I don't buy John Paulson's view of double-digit inflation in 2012. Just don't buy it. I guess he's one of those inflation hawks Paul Krugman keeps warning us about. Frankly, I'll listen to Krugman first. I buy his arguments is all.

Bad time to be doing this, but I have to get my yields in a row. But I'll go slow, remind myself that at least I'm not buying Nokia.

Afterthought: It's weird being a supporter of Occupy Wall Street and an investor at the same time. There is, actually, no conflict. It might not be smart to play the dog track -- as Atrios calls the markets -- but you can't sit on .5% CDs. So whaddya gonna do? Be long equities, get into bonds, and donate to the Occupiers.

1 comment:

  1. There is nothing wrong about doing things on your own. It sometimes even more rewarding that way. However, I agree that it is definitely a good idea to pick up some ideas from experts. That way, you at least know what you're doing.

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