Thoughts From The Non-Disaffected

Occasionally, it’s good to know that not everybody reading my views thinks I’m nuts.

In response to yesterday’s article, John writes:

You have to be thick skinned to be in your profession.

Over my 40 years of investing I’ve observed that about 75% of newsletters have a negative slant most of the time. It seems that only about 5%-10% of newsletters actually give reasonable forecasts in up and down markets.

I have also observed that the more dour the consensus of newsletters, the more the market seems to climb (the wall of worry). I normally subscribe to or read both types of forecasts as at any time you can find both points of view.

Then, based on information from the newsletters and my personal observations, I make my own investment decisions. I usually find myself on the other side of the consensus. I’m not sure that makes me a contrarian, but it has made me a successful investor.

On the basis of my subscription to your letter for the last year, I put you in that 5%-10% of better investment newsletters.

Thank you for that, John. I agree that the majority of letter editors are bearish, and even touch on that point in my stock book. It’s always safer to call for trouble and then leave everybody pleasantly surprised when it doesn’t come — people are happier than they expected and nobody complains.

I also agree that a letter is a starting point on the road to better investing. It’s a good place to get new ideas and guidance, but a lousy place to turn of the brain and blindly follow.

Chris agrees, too:

I pay a very reasonable price to a smart and successful investor to hear his best ideas for buying individual stocks.

Buying individual stocks is exactly what an intelligent investor should do in a bear market. Stocks go up. Stocks go down. But there’s always a bull market somewhere. All of the macro stuff is interesting and not without importance, but much of it is simply noise.

I have investigated a lot of investing services and passed on all except for two. I feel I have more than enough bang for my buck with your newsletter and my Motley Fool Hidden Gems subscription. Thanks for your newsletter as I approach my first year with you.

You’re most welcome, Chris.

Finally, Dave Van Knapp of Sensible Stocks has this to add:

Not all predictions are correct (by definition), and yours may not be either. Alan Greenspan just the other day put the chance of a recession at about 33%. I would put it lower, but it is not zero. So your detractors are not 100% sure to be wrong, any more than you are 100% sure to be right.

But my belief is that the market will be higher six months from now, and that the chance of a recession is low. I have been greatly swayed by the Fed’s actions a couple weeks ago and its rate cut last week — that’s the main reason I don’t think there’ll be a recession near-term: the Fed is going to try to stop it, and I think they acted in time.

The only thing I know about the clock theory is that even a stopped clock is right twice a day.

To those who think Brent’s comments yesterday were out of line, just remember that maintaining the poise that the market requires for success is not easy for anybody, much less somebody just starting out. It’s natural to be buffeted by greed and fear, more the latter these days.

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