But first . . .
Catherine Hogan: ‘I live in Seattle and a doctor friend of mine has been advocating the use of marijuana for medicinal purposes. He works with AIDS patients. Apparently Mr. Ashcroft has taken an interest in my friend to the extent that he sent DEA agents who have questioned his patients as they were leaving his office and asked them if my friend had prescribed marijuana and in addition if they had had sex with their doctor (for heaven’s sake!!). Obviously I can’t use my friend’s name, yet, but I thought it was an interesting tidbit.”
☞ To those of us on the left and in the middle – or even the moderate right – it is sobering to think that Republican Senate Minority Leader Trent Lott and Republican Majority House Whip Tom DeLay could soon be our ‘checks and balances’ on John Ashcroft and Clarence Thomas. (Speaking at the First Baptist Church of Pearland, Texas, last month, DeLay said that God is using him to promote ‘a biblical worldview’ in American politics.)
And this . . .
Anonymous: ‘Even BOREF doesn’t claim that they have a motor that is 30% more efficient. They claim that it reduces the wasted energy by 30%. Since the average 10hp electric motor wastes 10% of it’s energy to heat, they are saying that they reduce this amount by 30%. In other words, they are 93% efficient versus 90% efficiency of a conventional motor. Real numbers, but not necessarily ones that make economic sense.’
And now . . . back to Dick Davis:
Item 8: Do It Yourself Investing
A popular slogan on Wall Street has been ‘Investigate, then Invest.’ That’s okay for some, but it’s not realistic advice for most of us who have neither the time, the inclination nor the academic skills to totally understand balance sheets, profit margins, book-to-bill rates or chart formations. I believe the time spent conducting your own research would be better spent checking out the track records of professional advisors. After you choose, give him discretion and let him do the research. You may have just as good a chance of being right as the pro when it comes to one, or even a few decisions, but over the long term, the professional with a good track record is likely to do better, and is worth his fee. There are some individuals who do have the talent to do their own research. They are the exceptions, and I expect a good number of them are in this audience. One caveat: Being personally involved gives retirees something mentally challenging to do with their time, another common interest to share with friends, something stimulating to discuss at gatherings and on the athletic field. When we pick winners and ‘beat the system’ it makes us feel good and validates our self-worth. These social and psychological benefits of do-it-yourself investing can be even more valuable than profit, though that may be a stretch.
Item 9: Any Approach Can Work
The perverse nature of the stock market precludes hard and fast rules. In fact, you can do the exact opposite of almost any rule providing you stay with it, and achieve the same results. Some look for bargains, others (momentum buyers) look for active stocks making new highs, in hopes of selling them still higher. Some investors look for value, others for growth. If you don’t try to time the market’s shift from one investment style to another (which is very difficult to do because it’s never clear cut) and you remain loyal to your focus, your day will come. The 2 keys are being consistent and letting enough time pass to let your consistency work.
Item 10: Negatives Of Being Totally Informed
The worst thing that can happen to a long-term investor is to be instantly and totally informed about his stock. There is always news on a stock. It is rarely as bad or as good as it sounds when first released. It is usually quickly forgotten and produces, at most, a squiggle on a long-term chart. But a sudden, sharp price move triggered by news and reported by an animated broker can create a sense of urgency, a call for immediate action. The result is a buy/sell decision based strictly on emotion. The truth is that it is only the passage of time that puts news in perspective. Such knee-jerk reactions are better made when emotions have had a chance to subside and reason a chance to prevail. Unless you’re a trader, it is simply not healthy to be too close to your stock. Just like your spouse needs space, your stocks need room to perform, down as well as up. Being hyper-informed about a stock can lead to a premature separation. If you’re holding quality merchandise, the best thing you can do is to take lots of vacations and stay healthy. Like the commercial says, ‘It’s your future – be there.’
Item 11: Advice To Family
Use restraint in giving stock recommendations to family and friends. Invariably, the loved ones you want to help most are the ones you cause to lose money. Perhaps you try too hard, or you’re too anxious or too cautious or too eager. Whatever the reason, some awkward situations can result. Resist trying to be a hero and you will avoid having to be a bum.
Quote of the Day
Markets are very good at what they do, in part because they harness greed and envy (in fact, all of the Seven Deadly Sins except sloth) and turn them into positive virtues.~Rocky Mountain Institute newsletter
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