The Value of Experts (Market Situation Report’s Transcription)


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                                                                             The Value of Experts

A lot goes through my mind every week as I sit down and think about what I should talk about with you.

I have this feeling, and it’s a feeling that won’t go away, that most of you want to read a story that is about the next IBM of India. I say this because every time I get an email from Porter Stansberry or Steve Sjuggerud, I want the same thing.

I want to know what ‘the’ stock is.  Do I own it?  Do I know about it?  What sector is it in?  Have I owned it before?

I’m curious.  I want to know.  And, most importantly, I want to know what its price chart looks like.

Anyone who has wanted to grow and protect their money for longer than a year, and has purchased multiple investment newsletters, knows what an amazing gravitational pull these stories have on our minds.  They are incredible.  I am no different.

But, here’s the secret (this is no slight on Porter or Steve, as they do some good research):

If knowing about the next IBM of India was the one thing missing in your investment world, you would have been rich ten years ago.  But you’re not, are you?  I’m not slighting you either; I’m just pointing out that most people are not willing to even recognize this, let alone talk about it.

Most people are no closer to finding out what works in investing, and they are starting to really get concerned.

Yes, you do need to have stocks to grow money, but the specific stocks are not the difference that makes the difference.  And, you know that.

If they were, everyone who subscribes to “pick of the month” newsletters would be rich. 

However, they are not.  They are still looking. 

There is an internal battle in my mind:  “What should I talk about?”  I do not want to talk about “just” another stock pick or another stock formation. 

I don’t think that makes the difference in peoples’ lives.  This is difficult, because I want to actually have breakthroughs with my subscribers.  I get the breakthroughs with my clients, because I get the honor of spending a longer period of time with them.  Unfortunately, we do not get that honor, so I do my best to give you my best each week.

Years ago, Joshua Boswell, a client at the time, said,  “Working with RC was like having him climb into your brain and make the right stuff easy and the expensive stuff hard.”

So today, let’s see if we can make the expensive stuff just a little bit harder for you than it was last week.

Today, I want to talk with you about “What Experts Say”.  Not what they are saying about current events or stock movements, but what they have been telling you for years or decades – things that don’t matter and are probably hurting your retirement and future.

On Friday, I will talk about Gold and Cyprus, and how they are connected.  But today, let’s turn part of our attention to “The Experts”.

What are the things that experts state as gospel that might actually be hurting your future?

Let’s take a walk down “Expert Avenue” and review some of their truths.

Expert Truth #1:

Academic Economists and big box financial advisors say that people are rational investors…seriously.  Academic Economists actually say that investors are rational AND build investment models on top of this truth. 

What do you think?  Are you rational when your money is on the line and stocks are moving against you?

How many rational people do you know when confronted with losing part, or all, of their money? 

Expert Truth #2:

The market is efficient.  There is no way to beat it.  Nada.  None.  Immediately get all of those ideas out of your mind.

Don’t you dare think that you can do better than the “markets.”  You can’t!

Experts say the stock market has every bit of news already factored into its price.  That means nothing is ever overpriced or underpriced. Over valued or under valued.  Never. 

I already hear you saying, “How do the experts explain people like Warren Buffet, David Einhorn, Kyle Bass, John Templeton, Bill Gross, George Soros, Jim Rogers, Benjamin Graham, Carl Icahn, Peter Lynch, Michael Steinhardt, David Dreman, John Neff, Ralph Wanger, Julian Robertson, Paul Tudor Jones, Louis Bacon and Jack Meyer, to name just a few???”

How do you explain them?

The experts just call them lucky.  What do you think?

 Expert Truth #3:

Experts say you should rebalance your portfolio each year.  And, that rebalancing, makes your investments much safer.  Really?  Sell your winners and put those winnings in your losers so that you can rebalance your portfolio? 

Why would someone sell winners to feed losers?

The answer, (hopefully), would be because they thought it would make their portfolio bigger.  History says otherwise.

With the stock market hitting LIFETIME HIGHS on the back of money printing and manipulation, I think it is a good time for reflection on expert sage advice…

What are the experts saying today? 

1. Gold is dead.  The direction from here on out is down for gold.
2. The U.S. Dollar is safe.
3. Regardless of direction, always be fully invested in the stock market.
4. Stocks are at a new plateau.  In fact, you should expect a 100% raise
going
forward.
5. Invest based on your age.  If you are 55 years old; you need to have
55% of
your money in bonds and 45% of your money in stocks.  Oh,
you‘re 65 years
old?  Then you have to have 65% in bonds and 35% in
stocks.

It is a time of reflection to see what works and what does not work.  If things are not working with what you have been doing, then stop doing it!

Stop going for more newsletters if the last 12 newsletters have not helped you.  Maybe it is something else entirely that you need to do.  This is one of the reasons why I started the Fearless Wealth Membership…I knew that connecting with people on a monthly basis was important.  I knew that being able to show people what really works in investing (and not just what sells well), is really important.

So, I started the membership.  If you haven’t done so yet, you should at least check it out.  You can check it out here.

I’d like to talk about one more thing before we part today.

I want to talk about investments outside the field of “stock market investments”, as I do not think the best investments are inside the stock market.

My best investments ever?  They are not stocks, bonds, ETFs, commodities or mutual funds.

My best investment by far, was marrying my wife.  Yes, I got lucky and no…it was not just luck.  I consistently put time and energy into my marriage to continue growing it.

Outside of my marriage, my best investment is, by far, my kids.  Now, you might say, kids – kids are liabilities and not investments.  I would wholeheartedly disagree.

Being able to experience the true miracle of raising kids from birth to whatever age they are now…has been my biggest daily reframe in life.  (Regardless of what happens in the markets; including the whooping that gold is taking.)

When I walk in the door, my two-year-old daughter and my five-year-old son immediately let me know why none of that matters.  They ARE experts at living in the present moment.

The joy of being in the present moment (or at least doing my best to be in the present moment), of the only true sages in this world, is second to none.

Perhaps you can look at your life and notice what some of your better (or best) investments have been, and that might put stock market investing into perspective.

So, the next time you have a great stock story in front of you, ask yourself, “How did the last 200 stock stories do for you?”

If they have made you richer and freer, then continue working your magic.  But, if you are no closer to finding out what really works, then maybe, just maybe, its time to try something else that is a little bit different.

Thanks for being with me this week. 

We have my semi-annual Strategy Gathering this coming Tuesday (April 9th at 7pm).  Real Estate is absolutely on fire.  Hundreds of millions and billions of dollars are coming into the market.  Ben Bernanke’s zero interest rate policy is having people flood back into the market like it was 2005.

We will talk about real estate and how interest rates, and demand, are affecting the market.  We will also see how those new bubbles are doing in stocks, real estate, and bonds.

Of course, we will go over the strategies and how they are doing.  I will have live, extensive Q&A so that you can personally ask me YOUR questions.  I will have the always-favorite Speed Investing, so bring your stocks with you.  

If we have time, we will review Market X-RAY and see where the value is today.

Together, we are growing and protecting your wealth,

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RC’s Note: I founded Fearless Wealth to share my ideas about wealth-building and leading a richer life. My Fearless Wealth team and I recently uncovered what some say could be the “greatest unfair advantage ever to the individual investor.”  The strategy is so simple.  You don’t have to spend hours reading about stocks or investing to become incredibly wealthy.  Learn more about this strategy – and try a risk-free subscription to Fearless Wealth.  Learn more here.

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