Foolish Cycle Continues

WhitneyThe experts are at it again. Not that they ever stop spouting off but when they change direction I think that’s a sure sign to ignore them. One such expert perpetuating this foolish cycle is Meredith Whitney.

The Difference

I’ve said it before, that if you use the gauge of who is richer, who garners more respect, and who can get on TV any time she wants then Ms. Whitney is far more qualified than I am to offer her financial advice. The difference is that I’ve been correct in my predictions and she’s been wrong though she’ll never admit it (especially to me).

What Now?

Stocks have gone up very quickly and there are various reasons for that but Ms. Whitney has been cautious about stocks – until now. CNBC states “Known more for her pessimistic take on the markets, and banks in particular, Whitney has turned in the opposite direction.” Run the other way!

Whitney says she’s “not been this…bullish…on equities in my career.” Yeah I know, but I have, and I’ve been right and she’s been wrong. I’m a lot more cautious, now, just as she seems to be jumping in with both feet.

This reminds me of another person I’ve called out for being a fool who jumps on whatever bandwagon is rolling through town, James Glassman, who wrote the book DOW 36,000 just as stocks were about to crash from their internet binge. Glassman later wrote, Safety Net, a book about how stocks were not a good investment and which favored bonds just before this amazing stock market run we’ve experienced these past few years.


My feeling on investing has evolved over the years and at one time I thought I could time the market, predict with reasonable certainty what individual stocks would do. I was wrong. Since then I have become a passive investor (passive is such a misnomer).

It’s been said that you can pick your friends, you can pick your nose, but you can’t pick your family; I’d change that to you can’t pick the direction of the market. And yet people try. They tried with internet stocks, they tried with housing, and they’re trying again with bonds.

My Advice

You choose whether you want to listen to these so called experts but my advice is to ignore these fools and invest with a long term view. Tomorrow I’ll have a post about how my saving and investing has enabled me to be aggressive when I wanted and cautious when I needed.

Posted in General, Money, Success and tagged , , , , , , by with no comments yet.

Trusted Fools

Meredith Whitney is very smart and very rich, getting paid lots of money to give financial advice. I’m sure the people who have listened to her have done well. But she has also made some really bad calls and the thing that got me, recently, was that one of those predictions, that there would be hundreds of billions of dollars of municipal bond defaults by December 2011, has garnered her a book deal. That’s right, she will soon have a book about a topic she was completely wrong about. I’m sure she’ll justify that misstep somehow but I, for one, won’t be buying that book.

As an author of a book about success, I guess I’m just not wrong enough to get a publisher or be interviewed on 60 Minutes. Watch the video below. Her prediction comes at 2:30 in.

Meredith Whitney is just another example of people making really dumb predictions, or doing really dumb things and becoming even more successful. I call this the fail up principle and it’s alive and well in the United States.

I wrote a rather impassioned blog post about one such person back in November, 2011. Carl Richards, aka Behavior Gap, has been held up as a financial sage for his clever drawings that simplify and astutely illustrate everything that Carl Richards has done wrong. If only he followed his own advice he’d actually have done well in life. Oh wait, in spite of a series of colossally bad decisions that culminated in Mr. Richards ruining his credit and losing his home to a short sale, he has a book deal, writes for the New York Times, and has a new job as, get this, director of investor education at St. Louis-based BAM Advisor Services.

I rarely write letters to the editor of magazines but I had to when I saw a glowing review of a book written by a guy who should still be in hiding for Dow 36,000his reckless advice over a decade ago. I’m speaking of James Glassman who co-authored a book titled Dow 36,000 just before the bursting of the internet bubble and well before the even worse economic crisis of 2008. This so called expert was either trying to cash in or is completely clueless.

Glassman wrote another book in 2011 that offered nothing new. In the letter I wrote to Kiplinger’s Personal Finance magazine I said Glassman’s latest book is “the same advice that honest financial advisors have been giving for decades.” At least this time his book didn’t push investors off a cliff.

I learned of Carl Richards’s horrible personal finance skills in an article he wrote in the NY Times, that’s right, a financial planner who was so dumb as to lose almost everything he had gained, got a job as a contributor to the NY Times – failing up. But would you believe that this is not the first time a New York Times financial writer was Busteda financial mess. I’m sure Edmund L. Andrews, economic reporter, did just fine as he too was granted a book contract to chronicle his stupidity – losing his home to foreclosure.

I’m still amazed that Jim Cramer is so popular. Who can forget Mr. Cramer saying that Bear Stearns was just fine? Actually he was right – all the executives at the former Bear Stearns are still incredibly rich, it was the stock holders who lost it all. At the height of the housing frenzy in 2006 Mr. Cramer said he was drawing a line in the sand, “planting a flag” on homebuilder stocks, saying that “this is the point where Centex, Lennar, Toll Brother, and KB home are done going down.” They went much farther down but that’s ok because he still has plenty of suckers, I mean viewers.

I’m doing just fine, maybe not as well as I could if I was a complete idiot but well enough for me. For the few who read my blog and my book, they can either accept my advice or ignore it but at least I’ve been consistently correct or maybe that’s my problem.

Posted in General, Success and tagged , , , , , by with no comments yet.