Investors enjoy the unique luxury of choosing problems that let them maximize the use of not just their IQ but also their EQ – emotional intelligence.
We had a lot of great experiences in Russia – mainly from family and friends. But at the same time it was also full of injustice, powerlessness, discrimination, lack of choice, and Russian-like poverty. In America, our past was a great motivator and none of the problems we encountered felt insurmountable. We feel very blessed to be here.
Trump’s ascendancy brings a lot of uncertainty – something the market is ignoring, for now. The business-oriented pragmatism that it loves today comes with nationalistic and protectionist “job creation” rhetoric that may result in trade (or even conventional) wars. U.S. foreign policy, trade, and military alliances that have been in place since World War II are being questioned by the new president.
I never thought I’d be giving writing advice. I was always the worst student in my literature class in Russia. I never received a grade higher than a C on any Russian essay I ever wrote. I have a theory that my teachers got sick of reading and grading my horrible essays, so they stopped and automatically gave me a passing grade out of pity. I don’t blame them.
During the past six years, the Federal Reserve neatly groomed, manicured and then finely polished investment slopes for all asset classes by lowering interest rates to unprecedented levels – providing a substantial accelerant that indiscriminately drove valuations of all assets higher.
Guy Spier published a book, The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment. It is not a traditional investing book. In fact, I’ll say that differently: This is the most untraditional book on investing you’re likely to encounter.
The article is very long. It is long for two reasons: first, it is was originally a two-part article that I folded into one; and second, I am dealing with the very complex topic of investing in today’s global economy. I wrote this article a year ago, and some themes like “be careful of MLPs” are not as relevant anymore, but overall it is still a very useful article for the world we face today.
The rise of the consulting industry, armed with cheap computing power and an abundance of stock-specific data, has harmed the industry, because according to them, a “value” investor is one who holds statistically cheap stocks and a “growth” investor is one who holds statistically expensive stocks. The truth is somewhere … well, actually it’s a lot more complex, and the consulting industry’s crude segmentations don’t capture it.
The article I will share with you today was in the works for over a year. I sat down to write it several times, and every time, until the last time, I walked away with just an incomplete paragraph or two. Just like any article about today’s global economy, it is an open-ended article. When I shared a draft with my father, his response was, “So What?” I answered … see the answer in the P.S. section.
Here is how Dale Carnegie puts it: “When dealing with people, let us remember we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity.”