Here at "A Dash" I recommend that you join me in reading widely and critically. Most people do not have the time for this, so let me offer a few suggestions for a 2010 review.
I want to have a little fun with this, but there are some good investment insights. These are the "Ten Best" lists from various sources. With a couple of exceptions, I emphasize sources you probably do not already read. I will provide the source and my own quick take, but you will have more fun if you look at the entire list, draw your own conclusion, and add your own insight in the comments.
If you really want to know what investors are thinking, why not look to the most popular articles in the mainstream media?
MarketWatch fits the bill. I think this choice represents what average people read about the economy and stocks. If you look at the list you will see why most people are scared silly and under-invested. The popular articles emphasize why the world is going broke, why we may have anarchy or a revolution, how banks are going under, and similar themes. I recommend this not for the content, but so that my astute readers can keep a finger on the pulse of the public. If you ever read the comments on these articles, you get a good sense of the mood of this particular attentive public.
It is also a good antidote for the current buzz about sentiment indicators, polls of a few investors about their opinions. This popularity index shows what people are really thinking about.
Try out Advisor Perspectives. This is an undiscovered gem for most investors. Robert Huebscher is a fine editor whose sophisticated audience of investment advisors seeks a deeper look into the financial issues of the day. This year's list of most popular articles covers topics ranging from debt and deficits, to gold, fixed income investing, and retirement planning.
The difference between the choices of average readers and those of the advisors is noteworthy.
What could be more predictable than our fearless leaders in Washington? The top political quotations from 2010 included a Vice-Presidental "F-bomb," a Supreme Court Justice dissing the Pres during the State of the Union, and explanations of witchcraft.
The lesson? Politics often involves simplifying issues to appeal to the marginal voter. Marginal voters are the least common denominator. If you want to be a smart investor, you need to see beyond the predictable appeals, expecting a lot of silly commentary. (By the way, not all of the 535 members of Congress are dumb, and many of the staffers are first rate).
Suppose that we focus instead on a most intelligent and high-minded group: Scientists. I regularly read The Scientist because it reports issues related to pharmaceutical companies, research findings, and other related news. Their list of the ten most popular articles had an interesting winner — a study of the effect of pornography on the incidence of sex crimes.
The lesson? Let us move beyond the obvious conclusion that scientific readers are just as interested in porn as average people. The investment angle: Understanding causation and correlation.
If I were still teaching research methods, I would use this as a class example. Everyone comes to this question with a pre-conceived notion and a reluctance to consider any real data. It is easy to find a study showing that most sex offenders had contact with pornography. This reasoning — going from effect to cause — is exactly what is wrong with most of current Wall Street research.
You have probably guessed the "surprise ending" to this story but read the article to make sure.
Since it is the football bowl and playoff season, let me share one of my favorite sports sites, Awful Announcing. Like most sports fans I fume at the constant mistakes made by announcers in their discussion of a game. At Awful Announcing you can register specific complaints about announcer blunders and even nominate them for something called the "Pammies." Here are this year's winners.
The lesson? At some point I realized that my reaction was similar to what I felt watching financial television. The sports announcers are actually better, since they generally do not shout at each other and are expected to be experts. So many financial announcers now have opinions. They believe that we are watching to hear what they think rather than to get news or listen to interviews with good guests.
There is a lot of air time to fill!
I hope you have enjoyed my somewhat whimsical look at some 2010 lists that you did not see elsewhere. Investors can and should draw lessons from many sources.