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Good investing is hard to televise
Superinvestors don't get their advice from carnival barkers
Most people don't know very much about investing in general, or about stock valuations in particular. It's widely perceived to be one of those subjects that is "too hard", even though it really isn't. The perception is largely a problem of conflicting incentives: Those who understand the material often have vested interests in making it look hard.
■ Fortunately, the material itself isn't as hard as many of its purveyors make it out to be. And more significantly, success is often far more a product of well-regulated emotions than of raw intelligence. Warren Buffett laid it out quite plainly when he wrote of the "Superinvestors of Graham-and-Doddsville" nearly 40 years ago, and yet his lessons collected then are of scarcely any greater popularity today than they were when Ronald Reagan was President.
■ Unfortunately for many, the truly valuable lessons seem too boring, so instead they turn to where the action and excitement appear to be. And one of those places is on television, where people like Jim Cramer make loud noises surrogating for investing advice. Unfortunately, people take his advice -- like a recent recommendation to buy the stock of the banking company that was taken over by the FDIC over the weekend.
■ Taking advice on investing from the showmen on television is like watching "SportsCenter" to learn about health and fitness. It's just a bunch of action shots, with little or no relationship to the actual discipline required behind the scenes.
■ Conditions would be vastly better across the board if more people fundamentally understood that the basic enduring lessons of investing aren't especially complicated, that success is largely a matter of patience and risk endurance, and that the best formulas for investing success are almost excruciatingly boring.
■ Good financial advice generally makes for bad television. Louis Rukeyser knew how to deliver it right, but he was a rare talent, and even then, his style was cut loose by PBS two decades ago. But it would do us a lot of good to realize that excitement ought to be chased in places where the stakes are low -- like on the baseball diamond -- and not in the retirement plans of ordinary Americans.
[Originally published in the Evening Post & Mail on March 13, 2023]
Don’t let it excite you