140 Characters, Your Retirement & McDonalds

For good or bad, many people live in a 140 Character world. We live in a world where sound bites and “gotchas” attract the most clicks (attention).

One of my close friends from years ago always wanted to debate me.

And because his brain was one that could easily and immediately bring up data from Economist articles (read: 140 character facts) he could always present a counter to any argument.

He didn’t necessarily believe in the counter argument, he was just good at arguing. And so finally one day I figured out why I didn’t want to spend as much time with him.

And this is what the world has evolved into.

Who can win the debate? Or said differently…

Who can capture your attention in 10 seconds (140 characters)?

Who can make you feel so scared about your future in the shortest amount of time that they can build a billion dollar empire around it (investment newsletters)?

140 characters doesn’t leave much room for, “is this even important…” Or, “does this even matter to my health, wealth or self…?”

It’s because “conversation” is out and “signaling” is in.

Signal the brain to think, am I safe?

The Internet has become so noisy with so many views, algorithmically sorting software now dominates all our lives.

People who are overwhelmed are living in someone else’s narrative of the world.

And that narrative is based on what’s best for the builders of the algorithm. Because they have   figured out how to signal your brain to click.

This is why single asset/sector investment newsletters are especially bad for your wealth.

Should you even be investing in “pot stocks” for example. This week it’s “pot stocks”… Wasn’t it crypto’s 12 months ago?  And then before that wasn’t it China? And then before that biotech breakthroughs? And before that gold?

Even McDonald’s is getting into the artificial intelligence/machine learning business, which is fancy for algorithms, which is fancy for “if… then programs.”

McDonald’s just spent $300 million to buy an AI company. So Micky-D’s can figure out what image to show when you order in the drive up window.

We are living more and more in someone else’s world. A world where we are asked to think less and react more.

McDonalds doesn’t want to leave the thinking up to you. Nor does Facebook, Google, Netflix, Apple or really any other Fortune 1000 company.  

They want machine learning software to present to you the “best” choice. But who’s it best for? And what’s wrong with thinking?

And while buying what McDonalds wants you to buy might be trivial. It’s telling. If people don’t start to think critically they will pay the price (read: fewer choices).

People feel they don’t have time to sit down and take a big step back and ask the big questions anymore like, does this even matter?

“If everyone is thinking alike, then somebody isn’t thinking.”  

George S. Patton

How many members of how many groups have stopped thinking?

The Crypto groups?

The marijuana groups?

The Democrats?

The Republicans?


Big Box Advisors?

What has been lost is nuance. Is choice. Is critical thinking.

Why does this matter?

Because the company that can win over your attention, owns you. Then your behaviors are how they want you to behave. Too 1984?

One of the most important ingredients to one’s portfolio is that it’s in investments that are going up (stick with me here as this will all link together).

But what does “going up” even mean? And how does “going up” get measured?

I come across countless investors owning assets and sectors that aren’t going up. Or are going up at a much slower rate than is needed. Please read outloud: Going up slower does NOT equal safer.

Why do people own assets that are clearly hurting their future?

Asked why investors were told to own a sector/asset that isn’t going up at all or going up unnecessarily slowly. They answer, “to be diversified.” Or “ya’ never know when the market’s going to drop.”

But whose words are those? Who’s frame of investing is that?

Those aren’t your money’s words. What is your money trying to tell you? Do you really think your money wants you “diversified?”

I was having a conversation with a prospective client on Monday, who’s money has been at Edward Jones for six years. And I pointed out to him 26% of his money has been allocated to international stocks the entire six years. 26%!

He was shown the following price chart (below) by me.

It was explained to him that if the black line is falling (which it’s clearly been for six years) then having 26% of his money on this relative price line (international vs. US domestic) unnecessarily was costing him and his wife real money.  

To be exact it cost him about $73k over six years. His account size was $400k (six years ago). So $73k is not trivial.

He asked for the math behind the number.

International stocks (VEU) were up 29% during the past six year period. And US Domestic stocks (SPY) were up 102% during the same period. For a difference of 73%.

This means his $100k that was allocated to international and not domestic didn’t grow an additional $73k. That’s real money. That “loss” of $73k over that time period acted as an additional 3% drag on his portfolio for five years.  

But you see, it’s not his fault. And I told him as much.

Just like people are not given choices in a polarized world. Investors are not given a choice in how their money is managed.

People are only presented the 140 character choice.  

My prospective client wasn’t given three different ways of growing money.

He was presented one.

He was presented the Edward Jones way. A way that might not look to avoid those nasty 50% drops in the stock market.

And this guy is bright.

This isn’t an IQ thing.

Democrats are not smarter than Republicans. Or visa versa.

It wasn’t his fault.

He could have gone to Raymond James or JP Morgan or Merrill and his allocation would have been almost the same. He would have provided the same date of birth and the same answers to their 30 question-questionnaire.

He wasn’t give a choice.

And today people are not given choices. They are manipulated into someone else’s narrative.

Soon people going to McDonalds drive throughs will not be given a choice either. This is the direction the world is racing.

Get your critical thinking hat on or live someone else’s profit margin.

I have nothing against McDonald’s. It’s a smart move. They have 68 million customers a day, of which more than half stay in their car. If machine learning can get each one to spend $0.50 more and feel better about their purchase that’s $20 or $30 million more each day!!!

McDonald’s is a thriving company that provides an amazingly consistent experience anywhere in the world for a low price.

And the investment world is noticing.

McDonalds stock chart is absolutely beautiful.

See for yourself. It’s going up. It’s doing what people would want their individual owned shares to do. The black line is McDonalds. And the blue line is the S&P500 with dividends reinvested (SPY).

But you don’t have to have your money follow someone else’s narrative. Or someone else’s frame of the world.

You have choices.

And the good news is you can accept this choice anytime.

You can learn very quickly what your money is trying to tell you.

You can find out if your money is best aligned with a big-box advisor’s approach. Or if you are thinking about buying yet another single sector investment newsletter, think about how the last one, two or three single sector newsletters worked out for your portfolios.

Would your money really want you to buy yet another one?

There’s a better way.

So choose wisely because it will determine how well you sleep. How long you work. And the quality of your daily stress.

In Your Corner,

RCPeck-Dig Signature.JPG

RC Peck, CFP

PS – Whenever you’re ready, there’s three things I can help you with…

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