Mar­cus Padley

In a hec­tic, tech­no­log­i­cal world, time is short – so don't waste it

Money Magazine Australia - - CONTENTS - Mar­cus Padley is the au­thor of the daily stock­mar­ket news­let­ter Mar­cus To­day. For a free trial of the Mar­cus To­day news­let­ter please go to www.mar­cus­to­

We are all fly­ing through life. Busy, busy, busy. Im­por­tant things to do. So very im­por­tant. Can’t talk, can’t stop, can’t go, can’t come, can’t make it, can’t do it.

Busy. We all have our own rea­sons. I write an av­er­age 6600 words a day, 250 days of the year. That’s 1.65 mil­lion words per an­num. The av­er­age length of a novel is 60,000 words. I write 27½ novels a year. Ex­cuse me, then, if I’m a bit busy. Then there are four kids who de­mand a lit­tle bit of at­ten­tion.

We all worry about money but the truth is that the most pre­cious gift you can give any­one these days, es­pe­cially your fam­ily and kids, is time, and all this tech­nol­o­gy­driven rush­ing about that’s go­ing on has el­e­vated its value to im­mea­sur­able heights.

Sim­ply turn­ing up, ring­ing up, lis­ten­ing and be­ing there is now the big­gest com­pli­ment you can ever pay any­one. I re­mem­ber a story about one of Kerry Packer’s birth­day guests fa­mously say­ing when asked whether they had bought a birth­day present, “I’m here, that’s enough isn’t it?” It is. The next time some­one turns up on your doorstep give them a big hug and say “Thanks”. Time. The most valu­able as­set on earth and the most gen­er­ous of gifts. Use it or lose it. Make it or waste it.

With this in mind I am go­ing to tell you how to save time in the fi­nan­cial mar­kets, be­cause when it comes to the stock­mar­ket there are a lot of things that waste your time. They in­clude: Pow­erPoint pre­sen­ta­tions. Pow­erPoint has em­pow­ered even the most unimag­i­na­tive, reclu­sive, bland but cre­den­tialled in­tro­verts to present “well”. It is that good. Which is bad. Click­bait. I re­ally hate the way click­bait jour­nal­ism has de­graded the in­tegrity of fi­nan­cial con­tent, which is now be­ing writ­ten for the in­ter­net not for the reader. It’s an in­sult hav­ing to ti­tle my ar­ti­cle “10 things that waste your time” but it is a ne­ces­sity in a search-en­gine world.

Me­dia talk­ing heads. We may look good

and put on a good show but we have no more abil­ity to pre­dict the fu­ture than you do. Take it for what it is, an en­ter­tain­ment, a show. But we are not clair­voy­ant. Any­one in­ject­ing ur­gency into the in­vest­ment process. There is no rush when it comes to the core pur­pose of a stock­mar­ket in­vestor: pick­ing stocks over long pe­ri­ods, not snag­ging a lucky rise to­mor­row. Be­ing ur­gent is re­ally rather pa­thetic.

War­ren Buf­fett em­u­la­tion. Sorry, but you are not War­ren Buf­fett and you can­not do what he does or some­one would be do­ing it for us and we would all be bil­lion­aires. So stop pre­tend­ing you can.

Cor­re­la­tions. Some stocks don’t need to be re­searched in de­tail. They are driven by one or two ma­jor driv­ers and you just have to get those right. Fortes­cue Met­als and the iron ore price, to name just one. In-depth re­search is point­less.

Hu­man emo­tions. They do noth­ing for the in­vest­ment process. Don’t let them get in the way. There is no “lik­ing” or “hat­ing” stocks. What you feel about a stock is ir­rel­e­vant. Think like Spock. Be an al­go­rithm. Dis­pas­sion­ate anal­y­sis is the goal.

The price you paid. What you paid for a

stock is ir­rel­e­vant. Whether you are in profit or loss has ab­so­lutely no bear­ing on the fu­ture share price. So be de­tached. Take a profit as quickly as you would take a loss and vice versa. A client once said to me, “Tel­stra owes me five dol­lars”. No it doesn’t, it’s not your brother-in-law. Econ­o­mists and strate­gists from big in­sti

tu­tions. They are all bi­ased to op­ti­mism. They have to be. They have a mis­sion: to keep the clients of their large-prod­uct-sell­ing wealth man­age­ment com­pa­nies happy and in­vested. They do that by gen­er­at­ing a per­cep­tion of con­trol and cer­tainty while over-em­pha­sis­ing the mar­ket’s re­lent­less rise in the long term. They can­not af­ford to speak their minds and they sim­ply can­not tell any­body to sell, ever.

Macro crap. We all spend too much time spent wor­ry­ing about Janet Yellen and Philip Lowe. Know­ing when in­ter­est rates are go­ing to rise or fall pales into in­signif­i­cance com­pared with stock pick­ing. Wor­ry­ing about macro crap would be time bet­ter spent de­cid­ing what to buy and when.

Bro­ker re­search. 90% is mar­ket­ing and suck­ing up to a com­pany, the rest is in­de­pen­dent ad­vice. Read it with your eyes open to the cor­po­rate pur­pose.

Con­sen­sus es­ti­mates. You will never make money out of know­ing what ev­ery­body else al­ready knows and is al­ready in the price. The only thing that moves share prices is the un­known and the un­ex­pected. If BHP hits its con­sen­sus fore­casts the share price doesn’t move. So to make money out of stocks you have to pre­dict the un­ex­pected.

Stock­mar­ket gos­sip fo­rums. A good idea but the re­al­ity is that they are too short term and anony­mous and be­cause of that are mostly lack­ing in­tegrity.

Next time let’s look at some­thing more pos­i­tive, things that don’t waste an in­vestor’s time, your time. There are a few.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.