A Defender of the Idea

In 2011 when Bank of America was trading at less than $5 a share, my friend told me he was thinking about buying the stock. My reply was something along the lines of “good luck with that.” I don’t really remember the conversation, but he remembers very clearly me convincing him not to buy the stock. I hadn’t thought about it until a few years later when he said “remember when you told me not to buy Bank of America? Now it’s over $20 a share.

Lesson learned. I never again gave an opinion about a stock that would be used against me later.

Talking about the market with friends and family is probably not going to make you look very good, as few comments about the stock market age well. Talking about it publicly, particularly with conviction, is definitely a losing proposition.

Michael Burry spoke about this in The Big Short, which Ben and I will be discussing in our first episode of Turn the Page, which debuts on Monday.

“I hated discussing ideas with investors,” he said, “because I then become a Defender of the Idea, and that influences your thought process.” Once you become an idea’s defender you had a harder time changing your mind about it.

Ben and I spoke about this on the show last week.

Do yourself a favor, the next time somebody asks your opinion about a particular stock, tell them you don’t really have one.