Finding I Don’t Know

Posted: March 8, 2017 in Uncategorized

There is no secret and there is no quick fix to finding you’re true interests in life. I have struggled for the last 10 years to find what is truly important to me. Only in the last few have I really began to find who I am and what I want out of life. You may ask why would I admit this? The truth is I don’t know. But I do know this; admitting I don’t know has freed me from my own self doubt and my own insecurities.  You may be asking yourself why is this relevant to investment management? It is quite simple in investment management as in life, it is o.k. to mutter the words I don’t know. How can we possibly know. The future is as unpredictable as ever. Many in this industry make a career out of guessing what the future holds and are paid handsomely for doing so. Unfortunately, the likely hood that they can have long term success is quite small. I liken it to playing basketball 1 on 1 with Lebron James; sure, you may score a basket but your chance of consistently winning is likely 0.

If you’re so sure about the outcome, how can you adjust and adapt? We see this fairly often, especially in the hypersensitive financial media. Voices like Schiff and Faber are played everyday, preying on investors fears. Unfortunately, for the investors that have believed what these men have said for the last 10 years they missed a rally that we likely won’t see again for quite some time, maybe ever.By admitting that you don’t know you open yourself up to multiple possibilities and flexibility. The two examples above are 2 very smart, educated, professional investors who have made a career of digging in. Both have been so sure of the imminent collapse of the economy or the market that they forgot to look at what is actually going on. Certainly, they can make a case for their argument and one that is fairly compelling. However, had they muttered “I don’t know” maybe they would have been able to see the forest through the trees.

The idea of this article is not to beat up any person or idea, it is to simply deliver a message that while we can evaluate CAPE, P/E, Stock prices, Bollinger Bands, RSI, SMA and a million other indicators the most important one we should look at is the long term IDK.

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