Uncomfortable Reading

I don’t pay attention to negative market commentary. I avoid it not because I want to stick my head in the sand and ignore potential warnings, it’s just that this type of content doesn’t make you a better investor. It’s mostly hyperbolic and fortunately, mostly wrong.

But the real reason I don’t read it is because it’s a waste of my time. It won’t change how I manage money for myself and it won’t impact how we manage money for our clients.  And most importantly, I just don’t need this in my life. It poisons your brain and rots your soul.

I’m hardly a raging bull (see here here and here ), however I don’t think it pays to be a bear, generally speaking. Unless you do this for a living, and even if you do, I think it’s nearly impossible to build a solid investment strategy around waiting for the next shoe to drop. So, I invest hoping for the best while being fully aware that you must be able to survive the worst.

But just because I avoid the guns and gold crowd doesn’t mean I ignore all commentary that isn’t rainbows and butterflies. There are plenty of investors who are pessimistic due to logic and reason and data.

I read Howard Marks, who I would describe as cautious, GMO who I would describe as bearish, and Jared Dillian, who I would describe as pessimistic, thoughtful, scarred, and self-aware. In a recent piece, No Pullbacks Jared wrote:

“There is a genus of financial commentary that revolves solely around the Fed and its relentless pursuit of credit expansion, and how it will result in inflation. I know, because I used to do this.”

Later in the same post he wrote:

“You should spend money on memorable experiences, then treasure the memories.”

Bearish and self-aware and aware of what really matters? This sentiment almost never come from the same person, let alone the same post.

Jared has been cautious for as long as I can remember and it’s no mystery why. His career in financial services began on the floor of the Pacific Options Exchange in 2000 right as the dot com bubble was bursting, and concluded at Lehman during The Great Financial Crisis. Like all of us, he sees the world through his own experiences. Jared doesn’t hide his biases and never shies away from calling it like he sees it. Even if I see things differently, I enjoy reading his opinions.

Everybody is aware that confirmation bias can be hazardous to your wealth, but it’s a hard habit to shake. It’s comfortable to read things you agree with, but it’s critical to seek out  people whose views make you uncomfortable. Even if reading opposing opinions doesn’t change your mind, and it rarely will, it can make you aware of potential blind spots, and for this alone, it’s worth it.


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