Breaking Through The Noise
Most of the investment-related articles on the internet contain only news. They repeat the same information on each website, with slight differences. And even if it’s no news, most of the analyzes, opinions, ideas are also rubbish. Either unfounded or belated. For example, offering something that has already skyrocketed is overvalued. So it is useless for contrarian investors, and even for trend-followers, it may come too late.
But still, there are always a lot of people giving tips, ideas. (And then, for legal reasons, they write at the end that they are not investment advisers.) Among others, there is SeekingAlpha, which specifically encourages authors to write “actionable” articles, which can be the base for investment decisions. But many smaller portals, opinion pages, investment blogs also follow this pattern. They give investment advice as if they did not give investment advice.
Can You Believe The Gurus? Do Useful Ideas Even Exist?
Do good investment hints even exist? By an old saying:
A really good investment is something no one talks about.
And by another skeptic one:
Who knows how to do, makes it. Who doesn’t teaches it. And who can’t even teach writes about it.
Is it true? Who invests really well keeps silent? Theoretically, if someone really understands finances, can earn a lot with it, and doesn’t need to write or speak about it. So is anyone who writes an amateur, a tinker, and not worth paying attention to?
Anyone who knows the solution won’t answer here. Anyone who answers doesn’t understand it,”–responded someone to a question recently in a Facebook group about investments.
9 Reasons That Can Make Even Billionaire Gurus Write
But it’s not that simple. George Soros, Charlie Munger, Ray Dalio, Mark Cuban, and many more superrich gurus wrote useful books, though they hardly needed it. They aren’t giving short-term investment hints but teaching how to succeed in the long term.
Let’s see the possible reasons, which in my experience, move investment gurus to write, to post, or to give profound interviews on investment-related websites.
1. Some Gurus Are Graphomaniac
Some people simply love to write, and they are proud of it. Because it feels mostly good to show what we know, they feel a psychic impulse, urge for it. They are happy if people celebrate them for their good articles or precious statements. They are sort of graphomans, in a good sense. (Of course, it can also be exaggerated. For example, if somebody is enjoying moving millions of investors on a roller coaster, like Elon Musk.)
2. The Gurus Want to Leave a Legacy Behind
Money is not everything. Many billionaires want not only a page in history by being rich but also by their clever thoughts. They want to leave behind a legacy for future generations, as great thinkers, scientists, or at least good experts.
That is also a reason why many billionaires distribute a part of their wealth in their lifetime already, giving it to charity. Others write a book or give comprehensive video interviews for the same reason.
3. Writing Helps Us Think
Writing helps many people sort out their thoughts, for example, in the composition of their main message or the argument. Or, at the end of the articles, reconsidering the conclusions. I can tell a story much better if I have written it before.
4. Gives Support in Research
Writing leads others to better data collection and research that they would not do otherwise. It becomes part of their way of working. For example, I may believe in something, based on my experience, I am convinced of it. But if I have to persuade others, I need more data and evidence.
5. Knowing The Behavior of the Crowd
Still, other gurus are curious about the behavior and reactions of their readers. They take the mood of other investors into account to a large extent in their investment decisions. That’s why they welcome comments, posts on Twitter or other social media sites. (See my article on investment social media.)
For example, if a particular investment is perceived by the vast majority as very bad, if it is very hated, then contrarian investors are often happy to buy it. Others use this to probe whether the popularity of some investment is on an upward trend.
6. Hobby, The Joy of Creation
For some people, writing is simply a hobby. We love to do it, enjoy it, and make it instead of bowling or watching football, DIY activities, or following some collecting habit. For me, for example, illustrating my articles, create an eye-appealing form, develop a nice design also causes some sort of joy and a sense of success.
7. Time to Exploit Synergies
Incidental income from writing can also be important for people who are not as rich but developing and talented. Exploiting synergies can be important for them: They can use the same knowledge and analytical results in their investments or work as well as in their writings. Synergies mean there are double benefits.
But even for a millionaire, a bestselling book can be a nice income.
8. Fame for The Guru’s Company
Managers or owners of companies such as brokerage firms, banks, asset managers may be interested in writing or commenting on something useful. Something which will prove to be a good idea. This will make them look very smart and informed so that they can get more customers.
True, people often argue on the internet that there is often a conflict of interest. Some managers may prefer to manipulate the market prices. But if they deceive investors and readers, lure them into a bad investment, they can also lose many customers. Their professional reputation deteriorates quickly. It can be a dangerous game for them.
Anyone who cares about their reputation, what people think in the long run, is usually worth paying attention to—for example, companies with a good brand that have been on the market for many years.
Conclusion: Follow The Gurus But Think It Through
So should we believe in investment tips, ideas and follow important people, gurus in our investment decisions? Often, the answer is yes. But they can have many motivations. Those who speak maintaining an investment position and confess it – still may be right. You may want to follow them after all.
But “believe” is not the right word. You need to look at who gives the idea, what are the motivations of the person, and what has had achieved before. Based on that, can you expect a good idea? You must investigate every notion, think it through. We have to do our homework.
Between Theory And Real-Life
Don’t forget that writing and investing in real life may be very different, even in the case of the gurus. Similar to the experiences with investing with toy money and real money.
Another popular strategy is to follow the copy trading method. At this point, people are not chasing tips but copying transparent portfolios of successful investors. But this could be the subject of another post.
Two good investment blog lists: