One of the things I’ve always found interesting is that, when folks attempt to describe investing history, they describe the “this time it’s different” investors as a priori, dyed in the wool optimists. That is, so much speculative folly resides in convincing oneself asset prices can’t go down for some newfangled reason.
That’s true! Investors do this in cycles pretty often. But few figure to ever contemplate the other side: pessimists constantly proclaim “this time is different” too—figuring out ways to convince themselves that valuations can’t go higher, it’s a new world of flat and falling prices, forever and ever, amen.
Right now, the pessimist “this timers” are prevalent: This Time, Our Economy Really Is Different
An important piece from Floyd Norris in last week’s NYT, and a view not articulated often enough these days. Japan and Tepco are an example here, but this is not about them—this attitude is pervasive in the last couple years.
For years I’ve made a practice of reading the Wall Street Journal daily. And to really do it, even for a very skilled skimmer, takes the better part of an hour. In any given week, I generally have a goal of reading the WSJ, FT, Economist, Bloomberg Businessweek, and The New Yorker. Then monthly (or bi-weekly), the New York Review of Books, Forbes, Fortune, and Foreign Policy.
That’s a lot of reading, but to my mind that’s what the investing job requires. I know people who do considerably more. I tried a tactic over the last month that’s worked beautifully so far: for daily newspapers, let them build up and then bang them all out one day each week. It’s simply amazing how many stories become generally irrelevant after just a couple days. Yet, it’s all still fresh enough that you stay informed and don’t miss an important op ed or editorial. It’s simply a myth that investors (except very specific types of jobs, like for traders) need to have up to the second information in most cases.
In the meantime, I’ll keep experimenting—reading is a skill set that needs to be continually honed and absolutely can be improved (both speed and comprehension). Most folks don’t bring much consciousness to how they read, but it matters.