I’m almost the worst investor in the world.
The only things that saves me from the distinction of being Number One Shittest is that I’m just sentient enough to notice how appallingly hapless I am, and to pull myself back before I do anything too disastrous.
Actually, there is another factor that also protects me: procrastination.
Being a greedy fellow, I’m always looking around for an investment opportunity. Some scam to make the big bucks quick. In every single case this has happened, I’ve balked for some reason or another, or just never got around to it, and later I realized that if I’d done it, I’d have lost everything.
I first noticed this anti-talent during the buildup to the Stupid Gulf War. I thought about buying up oil somehow in order to take advantage of the spike in prices when the war started.
Aaaand prices went down. But I never got around to it anyway.
Then there was the time I looked for specific stocks to buy – undervalued companies with a strong business model that was building on clear social or demographic trends. And I found one! It was a tutorial company that was rapidly growing in the breeding-ground suburbs.
I never got around to doing anything about it and a few years later they went belly-up.
Another time I decided that I should diversify into some private equity. No – not just that – a start up! And make the big bucks! I happened to know a guy leading a promising tech start up. He had the perfect background for making it work, he’d assembled a great team, and this fellow happened to be one of the luckiest blokes I’d ever met.
I never got around to getting in touch with him and recently that business crashed and burned so spectacularly that, if you’re Australian, you probably heard about it in the news.
So, I’ve learned my lesson. Being an idiot, I just put my money into plain old index funds, bonds and some cash. That’s it. Nothing fancy or even interesting. The only other thing I might invest in some day is property, and that would be a cheap apartment to live in that would not require a loan.
Knowing just how stupid you are is the beginning of wisdom. Yes, only the beginning, but I guess that’s better than never starting at all.
But then . . . having written this, I’ve thought of a counter-example. An investment idea that I didn’t get around to and regretted afterwards.
It’s a biggie. You know it. Got it yet?
Just before moving to the jungle I was going over my finances and thinking, I should diversify some more. Maybe instead of just cash I should hold a bit of Bitcoin. Might go up, after all. Might go down – so just put some in. How much? Ten grand.
There would have been no risk of selling too early because I didn’t have the internet access to see the value rise nor to make a transaction even if I’d wanted to. Exactly at the point I got out of the country and saw what was going on, it had reached its peak and was edging back down again.
I would have made more than $100,000 in six months.
But I never got around to it.
What is the moral of the story?
Nothing, really. The people who bought up Bitcoin weren’t brilliant, they were just lucky. Bubbles are unpredictable. The price might equally have fallen, or regulatory changes might have reduced its worth to zero. You never know.
I’m going to stick with my policy of boring investments. I’m not even going to earmark 5-10% of my money for playing around with. It’s a waste of time that I could use doing something more productive, and I’d almost certainly fritter that amount away on stupid shit, anyway.
If you’re really clever or have a special insight, perhaps you should take a risk. That’s how most rich people did it, often by investing in their own businesses.
But if you’re a dullard like me and know it, stick with boring.
Boring is the fool’s friend.