Why We Do What We Do

 

Why do you write about investing, behavioral economics, regulations and Wall Street? Why do you think it is important for money managers to write regularly?

 

This question came up recently. I thought it was interesting enough that rather than give a knee-jerk response, I should think on it for a while. My observations follow:

1. Opposing Interests: There are well-funded, deeply entrenched, financial institutions that have an agenda that is not in your (or my) best interests. Though this might not have been the case at one point in the past; unfortunately, the new reality is here to stay. Many Wall Street firms have a financial interest that is directly opposite of what is in your best interest. This is the nature of capitalism.

2. Noise: In the process of pursuing their goals, these firms manage to spill an enormous amount of confusing, misleading and often outright false information. I have previously called this the endless firehose of bullshit (if you know of a less coarse way to describe it, let me know).

The hundreds of millions of dollars spent on advertising, the mindless repetition of debunked ideas in the media, the myths that permeate trading desks and investment committees;  all of these add up to an information matrix that is opaque, conflicted, confusing and expensive for investors.

3. Media: We are often asked why we blog, write, and publish.

Here is why: I am deeply, morally offended by the amount of dishonest, atrocious fuckery I see.

I am fortunate to have a platform upon which I can pushback against the nonsense; this blog (Typepad circa 2003) morphed into the Washington Post (2X/month) into Bloomberg (Daily). Having an ability to counter whatever nonsense we see is a responsibility I take seriously.

4. Gravitas: More than merely pushing back, I am very aware of the weight words carry when we send them off into the world. A recent conversation with someone who surprised me by repeating back to me my own words from 10 years ago caused me to think about how deadly serious anyone who writes about finance should be with their words. Irresponsible websites and authors cost people millions, and perhaps even billions of dollars with their recklessness.

I referenced the nature of capitalism above; the economic system that is capitalism works best when consumers are smart and well informed.

5. How We Manage Money: Someone once asked me “Why do you take this stuff so seriously?” The answer is that our clients’ monies, our own money, and that of our families’ are all expressed in investments based on the same philosophy we write about continuously.

We manage our own money the same way we manage that of clients, we eat our own cooking. All of my personal savings are in the firm’s portfolios; the same is true for everyone else here, including investment portfolios and 401ks. (my wife is a few months away from being able to roll her 403b into our portfolios).

We have joined the cult, have drank the Kool-Aid, and deeply buy into this philosophy.

~~~

For those of you who want to learn more about our obsessive pursuit of the best way to invest money, please contact us. Send an email to Info -at- RitholtzWealth -dot- com; or call 212-455-9122.

 

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