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