My recent readings and listenings (via podcasts) has focused on a lot of financial advice. It’s made me realize that a lot of people don’t know a lot, and that includes me.In Flash Boys, Michael Lewis laid bare how few huge institutional investors knew about high frequency trading. These are people who manage billions of dollars, but don’t know how a few cents are added to most of their trades.
At Abnormal Returns, Tadas Viskanta (former hedge fund manager) said that people may give advice for when to get into the market, but don’t give you advice for when to get out. That’s like a personal trainer who tells you to start running but not when to stop.
One years ago Clorox and Campbell Soup stocks were labeled "sell" by 2/3 of advisors. Over a year those stocks returned 18 and 26%.
Then there was a beacon in the ever present storm of advice. Jason Zweig said to learn enough about the market so you can say, "I don’t know and I don’t care."
At first I rolled my eyes about this because of the tinge of ignorance in the expression. As I learned more though, I realized how right it was. Almost no one regularly knows what’s going to happen. That’s the first part, "I don’t know" is an admission that I don’t know – and neither do you.
The second part, "I don’t care." comes from knowing enough to invest accordingly. Movements up, down, red, black, bearish, or bullish don’t matter. So I don’t care.
That’s my financial advice.
What I read this week.
I finished The Name of the Wind, a fantasy story about an old inn keeper who is more than meets the eye. It was good and devoured a few late nights and spare minutes in the school parking lot. It also has a narrative arc I hadn’t read before
I finished Flash Boys too. This was Michael Lewis’s story of the team that figured out what the high frequency traders were doing and how to stop them. It’s a typical Michael Lewis book. It’s entertaining, explains something complex in a clear way, and has some great characters.
Both were good.
What I wrote this week.
At The Waiters Pad I published notes on Naval Ravikant, Sanjay Bakshi, and Tren Griffin interviews. All 3 men are really smart and gave good interviews to write up. I also learned a thing or two.
I also wrote about 3 Things I Learned from Brad Feld and how breaking my iPhone has made me more productive.