This week’s installment is called "Your Fault, Dear Reader." The title credit goes to my well-read editor, who crafted the clever twist of William Shakespeare’s Julius Caesar ("The Fault, Dear Brutus, Lies Not In Our Stars, But In Ourselves").
Here’s an excerpt:
Bad Excuses for Poor Investments
"Over the years, I have heard every complaint imaginable for why losses occur. Inevitably, these gripes go something like this: "It’s not my fault but the fault of:
-The analyst who recommended it.
-The banker who did the deal.
-CNBC, which hyped it.
-The talking head who loved it.
-My brother-in-law, who got a hot tip on it.
I’ve heard people complain about their broker’s bad advice, the lousy execution they got, and how a market maker or specialist hurt their trade. Other kvetches? Management stinks, insiders are dumping shares, regulators are overzealous. Margin calls did it. Or was it the president’s policies or congressional gridlock or Chinese imports? Really, who can trade when the economic data are cooked, and the "Plunge Protection Team" counters your best positioning?
I’ve overheard people complain that they lost money because Alan Greenspan raised, lowered and/or left rates unchanged. Oh, and Eliot Spitzer, too.
Well, folks, I’ve got some bad news for you. None of those are the reason any of you lost money. The dirty little secret is much simpler. You lost money because you bought a stock, and that stock went down, and then you sold it. Period, end of discussion."
Based on the email response, I hit a nerve. People were upset about the
indicted NYSE specialists, about WorldCom and Enron, and about banking
corrupted analysts. One person questioned whether I was raised in a
third world country. That response suggests their complacent
not-my-fault worldview was shaken.
Call it tough love. The rest of the piece can be seen here.
Your feedback is appreciated . . .
Apprenticed Investor: Your Fault, Dear Reader
4/12/2005 7:07 AM EDT