10 Popular Investing Beliefs We Should Be Questioning

T

tenant13

Full time employment: Posting here.
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It's the title of today's economic podcast I enjoy following. https://www.coindesk.com/10-popular-investing-beliefs-we-should-be-questioning Obviously we all have opinions about investing and that is just that: opinions. What I think is "unique" about us is that we have a lifetime experience and approach to investing with the "been there, done that" attitude. I'd be curious if there are other beliefs you could add to the list - I'm sure you'll dismiss plenty of those that are already listed or shrug others as obvious :). To me number 8 and 1 are in that "duh" category but the podcast is geared towards younger crowd so I understand why those are on the list.

In case you don't feel like listening here's the full list of those beliefs worth questioning (he elaborates on each point):

10. Buying a home is better than renting
09. Passive index investing is a good way to build wealth
08. Ignoring compound interest in your twenties and taking risks is ok, you'll have time to make up for it
07. Your portfolio should allow you to sleep at night
06. Markets hate uncertainty
05. Investing in technology companies is not value investing
04. Cash is trash
03. US treasuries are risk free
02. Bitcoin is backed by nothing
01. Stocks only go up
 
It’s a bitcoin blog. Not something I would put a lot of stock in but will listen just in case.
 
Save for your future retirement.

I used to believe in this, but increasingly I'm seeing people who didn't are simply asking for those who did to pay for everyone that didn't.

Maybe there is an new saying: Live now and receive later.
 
Sorry, Bitcoin is backed by nothing.

As far as adding to the list, I have nothing but old news.

1) Stock picking doesn't work
2) Past performance really is not predictive of future performance.
3) Anybody writing or selling investment advice either has no confidence in his/her own predictions or has already tried to profit from them and failed.
4) Anybody who can actually predict stocks in a useful way will be long gone on a private yacht or a private tropical island. And they won't be giving anyone the recipe for the secret sauce.
 
OldShooter said:
Sorry, Bitcoin is backed by nothing.

As far as adding to the list, I have nothing but old news.

1) Stock picking doesn't work
2) Past performance really is not predictive of future performance.
3) Anybody writing or selling investment advice either has no confidence in his/her own predictions or has already tried to profit from them and failed.
4) Anybody who can actually predict stocks in a useful way will be long gone on a private yacht or a private tropical island. And they won't be giving anyone the recipe for the secret sauce.
Click to expand...

Your 4th point is so logical, but missed by many.
 
OldShooter said:
3) Anybody writing or selling investment advice either has no confidence in his/her own predictions or has already tried to profit from them and failed.
4) Anybody who can actually predict stocks in a useful way will be long gone on a private yacht or a private tropical island. And they won't be giving anyone the recipe for the secret sauce.
Dtail said:
Your 4th point is so logical, but missed by many.
Click to expand...
Click to expand...
Maybe true of the general public, but I think most here get it - that’s why there are so many DIY investors here. 3 and 4 are just the two sides of the same coin?
 
tenant13 said:
The podcast itself is more about macroeconomic trends but yes, it's crypto friendly.
Click to expand...



I’ll take your word for that but when a bitcoin blogger polls his followers via twitter to state myths about investing and responds to the top ten items, the methodology is uh, unconventional. I’m still listening....
 
tenant13 said:
It's the title of today's economic podcast I enjoy following. https://www.coindesk.com/10-popular-investing-beliefs-we-should-be-questioning Obviously we all have opinions about investing and that is just that: opinions. What I think is "unique" about us is that we have a lifetime experience and approach to investing with the "been there, done that" attitude. I'd be curious if there are other beliefs you could add to the list - I'm sure you'll dismiss plenty of those that are already listed or shrug others as obvious :). To me number 8 and 1 are in that "duh" category but the podcast is geared towards younger crowd so I understand why those are on the list.

In case you don't feel like listening here's the full list of those beliefs worth questioning (he elaborates on each point):

10. Buying a home is better than renting
09. Passive index investing is a good way to build wealth
08. Ignoring compound interest in your twenties and taking risks is ok, you'll have time to make up for it
07. Your portfolio should allow you to sleep at night
06. Markets hate uncertainty
05. Investing in technology companies is not value investing
04. Cash is trash
03. US treasuries are risk free
02. Bitcoin is backed by nothing
01. Stocks only go up
Click to expand...


While it is, of course, inaccurate to say that "stocks only go up," it is also absolutely true that the general trajectory of the stock market over time is up. Lots of zigs and zags, though.
 
OldShooter said:
Sorry, Bitcoin is backed by nothing.
Click to expand...

Since we're are just exchanging opinions in this thread I dare to throw another one into the pot: Bitcoin Is Not Backed By Nothing

OldShooter said:
As far as adding to the list, I have nothing but old news.

1) Stock picking doesn't work
2) Past performance really is not predictive of future performance.
3) Anybody writing or selling investment advice either has no confidence in his/her own predictions or has already tried to profit from them and failed.
4) Anybody who can actually predict stocks in a useful way will be long gone on a private yacht or a private tropical island. And they won't be giving anyone the recipe for the secret sauce.
Click to expand...

I would not completely agree with "stock picking doesn't work". It may (as a high risk informed gambling) if you're a vigilant trader/speculator rather than a long term investor. It also works to a certain extent if you're building your portfolio around dividends.

And this is a fun article about a mysterious close fund consistently beating the market for years. Yes, the secret sauce stays secret :cool:
The Famed Medallion Fund Is Crushing It.
 
I think about (1) stocks can only go up in a slightly different way.

Fiat currency in the long term only goes down making it appear that a mixed holding of all assets go up and each ultimate tired dog of an investment in any country can have a good day, month, year, decade, or century.

Golly Aunt Bea got any tips for up and coming AM Radio networks? : )
 
tenant13 said:
... I would not completely agree with "stock picking doesn't work". It may (as a high risk informed gambling) if you're a vigilant trader/speculator rather than a long term investor. It also works to a certain extent if you're building your portfolio around dividends. ...
Click to expand...
This thread is not the place for an extensive discussion, but although many people believe as you do I know of no research or statistics that support the belief. On average, stock pickers deliver the market average less their costs. More importantly, stock pickers' results in successive measurement periods are approximated by a random process. I.e., no identifiable skill. It is definitely possible for someone to flip 8 heads in a row but that does not support a belief in the existence of skillful coin flippers. Here is six minutes of video on the subject: https://famafrench.dimensional.com/videos/identifying-superior-managers.aspx
 
Dtail said:
Your 4th point is so logical, but missed by many.
Click to expand...

Right. Still in my working years with my peers all over the board in terms of our investment journeys it was not surprising to find a few late-bloomers start telling me about the next hottest stocks , Hertz, Liners, Oil, Gold?

I'll stick to my well diversified selection and those few winners that have been good to me. ;)
 
ILikeStarTrek said:
This one is absolutely true. And it's a real problem. What to do with your [-]trash[/-] cash ? Fortunately, there is a solution. I happen to be a collector of [-]trash[/-] cash. PM me, and I will provide a Paypal link that you can use to send your [-]trash[/-] cash to me.
Click to expand...

Lol, you missed the the title of the thread: beliefs to question. This particular catchphrase came from Ray Dalio at Davos in January and is on the list as one of the questionable statements.
 
Sunset said:
Save for your future retirement.
I used to believe in this, but increasingly I'm seeing people who didn't are simply asking for those who did to pay for everyone that didn't.
Click to expand...

Those people you speak of were listening to this song back in the 80s.

I've got a '57 Cadillac with Batmobile wings
Pink and black striped interior that's fit for a king
No money down, fifty years to pay, be glad when it's mine
"Saw you coming!", said the dealer as I signed on the line

Live now - pay later, Live now - pay later

I got a fifty room country mansion up in the hills
My landlord says I can have it, long as I pay the bills
I bought the furniture on credit at a fabulous store
The man said, "Next time you come in, why don't you spend a little more?

Live now-pay later, Live now-pay later

How many possesions do I possess?
I started with nothin', now I've got less
How long will my credit last this time?
Live now-pay later, that's how it's gotta be
If money talks, well it sure ain't talkin' to me!

My doctor told me that I'm crazy to abuse myself this way
Too much alcohol and jelly roll, someday I'm gonna pay
No time for tomorrow, I'm too busy havin' fun
But when the bills come in, I know it's time for me to run

Live now-pay later, Live now-pay later

There's a hole in my pocket where my cash used to be
Rubber checks and credit cards have been so good to me
How long can I spend my life on loan? oh yeah
Live now-pay later, that's how it's gotta be
If money talks, well it sure ain't talkin' to me!

 
tenant13 said:
Lol, you missed the the title of the thread: beliefs to question. This particular catchphrase came from Ray Dalio at Davos in January and is on the list as one of the questionable statements.
Click to expand...

No, I didn't miss the thread title; that's why I was affirming in my post that #4 wasn't to be questioned but "this one is absolutely true"! Hopefully people will contact me if they are looking to dump that pesky cash! :)
 
Sunset said:
I used to believe in this, but increasingly I'm seeing people who didn't are simply asking for those who did to pay for everyone that didn't.
Click to expand...

Ants and grasshoppers.

We need to make sure kids are taught their Aesop's Fables.
 
Here's another BS belief:

"In the short run, the market is a voting machine but in the long run it is a weighing machine."

Which seems to suggest that in the long run, one gets ahead with stocks, because they are an asset-producing machine...

That's BS! Wait for 30 years, and if you want to get out of the market and "crystallize your profits", the Wall Street Gang can still manipulate the market and bring it down for a "fire sale", just because someone from their gang of thieves, wants to enter, or re-enter the market.

Oh, and ... where are the customers' yachts? :)
 
Last edited:
A little too much wine tonight before typing?
 
Not quite. It's rather the consequence of being astonished by the shocking difference between what one's left with after reading 30+ financial porn books, and the reality :)
 
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