My Worst Investment Ever June 2023
ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this seventh episode, they talk about mistake number 11: Do you let the price paid affect your decision to continue to hold an asset? And mistake number 12: Are you subject to the fallacy of the hot streak?
LEARNING: Look at everything you own from an economic perspective and decide whether to keep holding or selling. Avoid FOMO (fear of missing out) and stock picking; build a diversified portfolio.
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Ep705: Vishal Bhardwaj – Do Not Let Emotions Run Your Business for You
BIO: Vishal Bhardwaj is a serial entrepreneur and founder of Predictions For Success, Engineer By Mistake, and Passionate Management Services.
STORY: Vishal gained immediate success when he started his company and had about 100,000 followers. He thought this indicated that people loved what he was doing, so he decided to sell a corporate gift for Diwali 15 days before the festival. He didn’t do any market research, so when he went to sell the product, no one would buy it as they had ordered their gifts months in advance.
LEARNING: Do proper research before you jump into anything. Don’t let emotions run your business for you. Timing is as important as pricing.
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Ep704: Harjeet Khanduja – Work Smarter Not Harder
BIO: Harjeet Khanduja is an international speaker, author, poet, visionary, inventor, influencer, and HR Leader. He is an alumnus of IIT Roorkee and INSEAD. He is currently working with Reliance Jio.
STORY: Harjeet regrets wasting so much of his life working hard instead of working smart. Though he succeeded in his career, he completely ignored his family and led an unbalanced life.
LEARNING: Learn how to delegate so you can have time to focus on other things in your life. You must care for your family and inner self to be more productive.
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Ep703: Laurens Swinkels – Stay Liquid Even When Investing Long-Term
BIO: Laurens Swinkels is an Associate Professor of Finance at Erasmus University in Rotterdam and Executive Director and Head of Quant Strategy at Robeco’s Sustainable Multi-Asset Strategies team.
STORY: Lauren bought a house in Rotterdam. Just five years later, he had to move to Norway. Laurens managed to sell the house in the Netherlands many years later at a loss.
LEARNING: Liquidity is very important even when investing long-term. Remove emotions from your decision-making.
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Ep702: Spencer Jakab – Don’t Take Investment Tips from People
BIO: Spencer Jakab is the global editor of the Wall Street Journal’s financial and economic analysis column, Heard on the Street. Prior to becoming a financial journalist 20 years ago, he was a top-rated emerging market stock analyst.
STORY: Spencer took investment advice without doing due diligence and ended up losing his entire investment.
LEARNING: Don’t take investment tips from people; do your due diligence. Diversify your portfolio. Don’t invest more than you can lose.
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Ep701: Charles Rotblut – Realize When You’re Lucky and Walk Away
BIO: Charles Rotblut, CFA, is a vice president and financial analyst at the American Association of Individual Investors (AAII).
STORY: Charles bought a Dotcom stock in 1998. A week later, the stock had tripled. His dad advised him to take the profits, but he insisted the stock would keep going up. Three days later, the stock lost almost all its value. Charles sold the stock and made very little profit.
LEARNING: Don’t confuse luck with skill. Utilize a rolling stop loss to manage risk. Always have a diversified portfolio.
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Ep700: Arjun Murti – You’ve Got to Get Out of the Battle At Some Point
BIO: Arjun Murti has over 30 years of experience as an equity research analyst, senior advisor, and board member, with global expertise covering traditional oil & gas and new energy technologies.
STORY: Arjun made a call that oil prices would quintuple from $20 a barrel in the 90s to $105 in the 2000s and stay there for at least five years. The price averaged $100 a barrel from 2000 to 2014, entirely consistent with Arjun’s call. However, after the 2008 financial crisis, the return on capital in the energy sector started falling. Arjun made excuses and continued to ride the wave all the way down.
LEARNING: Let go of your ego and get out of the battle at some point. Frameworks need to grow, evolve and adjust to circumstances. Understand and inculcate reversion to the mean into your thinking.
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ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this sixth episode, they talk about mistake number 9: Do you avoid admitting your investment mistakes? And mistake number 10: Do you pay attention to the experts?
LEARNING: You’ll only learn from mistakes if you admit that you made them. Just because someone is famous and confident in what they’re saying doesn’t mean they’re experts who know what they’re saying.
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Ep699: Steven Wilkinson – Your Success Is 100% Dependent on You
BIO: Sir Steven Wilkinson is the founder and CEO of Good & Prosper and has been involved in business finance and investment for the best part of 30 years, having started working for Merrill Lynch Investment Bank in Munich, Germany, in 1987 at the age of 24.
STORY: Steven entered a successful partnership that saw them take a stock from 50 cents to 400 euros. They made so much money from their business, but the problem was Steve wasn’t ready for that kind of success. He had no system for dealing with the wealth he created and eventually lost all his money.
LEARNING: Being successful is 100% dependent on you. Working on yourself is the key to having whatever it is that you want to have.
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Ep698: Shawn O’Malley – Geopolitics Can Take Your Investment to Zero
BIO: Shawn O’Malley is the chief editor and writer of the We Study Markets newsletter from The Investor’s Podcast Network, the world’s largest stock-investing podcast with over 110 million downloads.
STORY: Shawn wanted to hedge inflation during the COVID pandemic, so he invested in the Russian ETF at the end of 2021. The ETF performed well, and Shawn was happy. Then rumors of Russia invading Ukraine started. The invasion happened in February, and the Russian ETF stopped trading, taking Shawn’s investment to zero.
LEARNING: Understand how geopolitical events and domestic politics affect investments. You won’t be compensated for lack of knowledge.
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Ep697: Peter Saddington – I Got Fired From My Own Company
BIO: Peter Saddington is a software developer, a multi-founder, an author, and a VC. He founded a $2.5M BTC mining fund, a $10M IoT fund, and a$50M Web3 fund in 2022.
STORY: Peter hired an engineer who had impeccable technical skills. Peter was so impressed by the guy that he decided to make him the CEO of his startup. Six months later, the guy fired Peter from his own company.
LEARNING: It takes more than technical skills to be a leader. A leader needs to be a person that can be led and can lead others.
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Blog post – Michael Howell Shares Why We Should Master the Liquidity Cycle to Predict Markets
Episode 689 of My Worst Investment Ever podcast, published on 24 May 2023, was such an interesting discussion with Michael Howell of Cross Border Capital that I tried to summarize below what he shared about global markets.
Understanding the liquidity cycle is crucial for investors as they navigate financial markets, with a focus on liquidity flow rather than interest rates. The global liquidity cycle has tightened, signaling a potential recession, but swift action and liquidity injections are easing strains. Collateral pools have overshadowed traditional credit availability in Eurodollar markets, and the transition from LIBOR to SOFR aims to improve transparency. US policymakers are vigilant in safeguarding Western markets and maintaining the dollar’s dominance. The Chinese yuan is unlikely to rival the dollar due to Saudi Arabia’s role, strengthening the dollar’s position.
Ep696: Neville Medhora – Hot Stock Tips Are Generally Unreliable
BIO: Neville Medhora has been starting businesses and side projects since high school and has learned a bunch about what works and what doesn’t work. He is an advisor to numerous software companies and teaches copywriting at his business, CopywritingCourse.com.
STORY: Neville started day trading in college and would try to get inside scoops to find cheap stocks that would explode. None of the scoops he ever got worked. Neville only made 5% return on his investment after a year of trading.
LEARNING: 99% of the inside scoop is unreliable secondhand information. Do your due diligence. It’s important to know when to sell.
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Ep695: Jack Farley – Don’t Play in Markets You Don’t Know
BIO: Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking.
STORY: Jack bought a lot of put options on the markets and individual stocks, notably Tesla, in February 2020 when the market was bearish. When the market crashed in March 2020, Jack made so much money. But, soon, the market started going up, and his position dropped to zero.
LEARNING: Don’t view the market as a place to create wealth; view it as a place to grow it. Don’t confuse being lucky with being an intelligent investor.
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Ep694: Carter Malloy – Valuation Is Not a Reason to Invest
BIO: AcreTrader’s CEO, Carter Malloy, grew up in an Arkansas farming family and has had a lifelong passion for agriculture and investing. Before founding AcreTrader, he spent five years as part of the founding team of a successful global equity investment firm.
STORY: Carter was super impressed by a healthcare software company whose stock was really expensive, and the valuation was crazy high. Carter decided to invest in the company. However, he lost most of the principal because the stock almost halved.
LEARNING: Valuation is not a reason to invest. Don’t bet against really good management teams.
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ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth episode, they talk about mistake number 7: Do you confuse skill and luck? And mistake number 8: Do you avoid passive investing because you sense a loss of control?
LEARNING: When gauging a fund manager’s performance, consider risk-adjusted performance. If you’re a passive investor and use a systematic strategy, you’re 100% in control.
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Ep693: Gisela Hausmann – Encourage and Appreciate Your Employees’ Creativity
BIO: Gisela Hausmann graduated with a master’s degree in film & mass media from the University of Vienna. She’s one of a dying breed of adventurers – she digs in and researches topics of interest from the ground up, then tells things as she sees them.
STORY: Gisela joins the podcast again, discussing her new book Winning @ Amazon. Today she shares advice on how employees can allocate their creativity in a way that’s appreciated. She also talks about why employees need to start thinking outside the box and focus on problem-solving and innovation instead of feeling sorry for themselves and staying stuck where they’re not appreciated.
LEARNING: Encourage and appreciate your employees’ creativity.
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.