By accident, this article is timed to be published on the two-year anniversary of this blog. I’ve written just shy of 100 articles with a majority of them focused on the topics of retirement planning and stocks. Though by accident, I suppose this article is perfectly timed because I was the fool before starting this blog. I was a fool because my ego and desperation led me to make stupid mistakes. Even though I’m a logical and strategic person, I was an emotional investor.
Truly, I was a gunslinger when it came to “investing.” I had no slow, rational rules-based plan that guided my decisions. Even though I didn’t want to lose money, my attitude to the loses was “better luck next time.” Long-term thinking meant 3-4 weeks. Better luck next time is what the card dealer tells the losing gambler at the casino.
I was reading a Yahoo article the other day and I saw an ad that reminded me of those days. Back then, that ad would have been playing on my emotional gunslinging trading days. It promised special access to knowledge or skill that I didn’t have. It promised predictions that would make me wealthy.
Ads For The Dummy
When my kids were young, free cash flow coming into the family was hard to come by. I suppose that’s the way it is for most families. When it came our way, I would put it into risky situations, hoping to hit the home run. I so wanted our situation to change and I wanted it to change quickly. It was my “rational” choice to throw it at stocks that had no way to be successful. I’m guessing these ads might have messed with the fragile mind of an emotional and disparate man.
Do we really think this “legend” that bought Apple at $1.42 is the right person to tell us where to invest? Seeing ads like these really tug at someone’s desperation. I’d love to have invested in Apple at $1.42 but I was too busy buying other cheaply priced junk. Apple at $1.42 was junk … it’s ok to say that. He was just lucky enough to have bought the right junk.
When you buy stocks that are that low in price they are on the verge of bankruptcy. Their revenues and earnings are down and they are likely high in debt. We are too smart (now) to fall for a stupid ad like this. The ad on the left basically says he predicted a pandemic that would cause havoc on the world … he didn’t.
Talk about playing on people’s fears, the two ads above provide the illusion that people had special skill and knowledge. Emotional, immature, and disparate people fall for these ads. They want you to buy something and they DO NOT have special skill … they predicted nothing! They want us to feel that another crash is coming and they know when … they do not.
Do you really think Bill Gates suddenly goes “all in” on anything? Billionaires are a special bread, money doesn’t have the same meaning in the way everyday people define it. Billionaires already took their risk (and got lucky) and they don’t want to lose their money. People do follow billionaires investments but we normal people have to be careful. We can’t afford to go “all in” because we have limited resources. And billionaires won’t go “all in” either because they don’t want to lose their money.
The ad on the left (John the college student) even admits he bet on risky penny stocks. If this really happened then he got absolutely lucky. It’s that simple! Trading is why most people lose money … it’s not investing. They think they have a system but they don’t. You, me, and them are not that smart. You will not get rich quick so just don’t play that game.
Conclusion
Over the last 2 years, I’ve tried to inspire people to invest and not trade. These ads are popping up in many places and they are ruining people’s lives … don’t let that be you. You will regret your decision to follow the foolishness of these ads. Unfortunately, they keep running them so people must be clicking on them and buying something from these companies.
That’s the inspiration of this article. Saving one person (especially my kids) from going down this path makes it all worth the effort to write it. I’ve said multiple times that buying quality stocks and holding them forever is the best way to build wealth. I’ve done every other type of “investing” in my life and I’ve finally figured out that buy and hold of quality is what true investing
I can think of no better way to finish this article than the obvious quote from poet Thomas Tusser:
“A fool and his money are soon parted.”
Thomas Tusser, poet from the 1500’s
Don’t be a fool.
Thanks for reading!
Mr. TLR