Posts filed under “Apprenticed Investor”

Bitten by the Gold Bug? Some Lessons



I did something different with my Sunday Washington Post Business Section this week. Starting with the 2,500 word long form discussion I wrote for Bloomberg, I simplified this and edited it down to half that length.

The print version had the headline Bitten by the gold bug? You’ll do well to heed the past, while the online version was titled A gold enthusiast? Listen to the head — and history). For those of you unfamiliar with media, the headline is typically written by an editor, and not the writer. (this is an adaptation that bloggers are forced to uncomfortably make when playing in MSM playbox). I still prefer the headline I wrote on Wednesday, 10 Lessons Learned from Gold’s Epic Rise & Fall.

The goal of the WaPo version was to take the basic investing concepts from the longer form version and make them more accessible to a general audience. I think we accomplished that.

Toward that end, here are the 10 lessons as written in the WaPo column:

Lessons from Gold’s Rise & Fall

1 . Beware the narrative
2. Carefully examine new investment products
3. Ignore history at your own peril
4. Leverage is always dangerous
5. Understand the circumstances of the moment
6. Don’t be unwilling to walk from a bad investment
7. Ask what is already reflected in the price
8. Don’t guess
9. Ignore end-of-the-world tales, conspiracy theories and other nonsense
10. Listen to the skeptics

The idea was not to make a call on the near term direction of Gold. (As I noted recently, I haven’t the foggiest notion whether gold goes up or down from here). The idea was to see what investing lessons could be learned from the errors others have made.

I hope you find it useful . . .



A gold enthusiast? Listen to the head — and history.
Barry Ritholtz
Washington Post, January 11, 2014

Category: Apprenticed Investor, Gold & Precious Metals

10 Lessons Learned from Gold’s Epic Rise & Fall

This morning, I have a massive 2500 word piece at Bloomberg looking at the rise and fall of Gold.

The key to the discussion are the 10 lessons that we all can takeaway from that cycle and the experiences of Gold investors. Hopefully, these will make us each better investors in the future.

Here is the intro:

“It has been quite the ride for gold: from under $500 an ounce a decade ago, to above $1,900 in 2011, gold gained more than 400 percent. Since its peak of ~$1,921.15 on Sept. 6, 2011, however, the shine is off the yellow metal. Gold plummeted 38 percent, recently breaking below $1,200. Yesterday’s close is within 5 percent of the lows, at $1,241.

If a 20 percent drop is described as a bear market, and a 30 percent fall is called a crash — what do we call gold’s almost 40 percent plummet?

This column is not an “I told-you-so” or an exercise in “Goldenfreude” (describing a “delight in gold bugs’ collective pain”). Rather, it is an attempt to learn some investing lessons from the epic rise and horrific fall of gold.

As an investor, I am a gold agnostic: When used properly, the metal is a potentially valuable tool in an investment arsenal. There are times when it makes for a profitable part of a portfolio, as in the 2000s. There are periods when it is a speculative and dangerous trade — such as the 2010s. There have also been decades when it does nothing, earning no return, generating no income, essentially dead weight to a portfolio, as in the 1980s and 1990s…”


Full column after the jump:

Read More

Category: Apprenticed Investor, Gold & Precious Metals

Financial Resolutions You Can Actually Keep

10 financial resolutions you can actually keep By Barry Ritholtz Washington Post, December 29, 2013     It’s that time of year, when many people resolve to be better: Gotta lose 20 pounds, stop smoking, start exercising. Human nature is such that come January, there will be a 20-minute wait for the elliptical machines in…Read More

Category: Apprenticed Investor, Asset Allocation, Investing, Psychology

Take Responsibility for Your Stock Losses

I wrote this a decade ago, and if you keep only one resolution this year, this is the one it should be. It will open a cascade of improvements for your finances . . .     Take Responsibility for Your Stock Losses Barry Ritholtz, April 12, 2005     “He who blames others…Read More

Category: Apprenticed Investor, Trading

Am I Too Bullish?

Over the past few weeks, I have been trying to push back against the usual contingent of bears. In particular, I have argued that this bull cycle is not yet over, markets are not in bubble and that people have been sitting for too long in way too much cash. John Coumarianos of the Institutional…Read More

Category: Apprenticed Investor, Cognitive Foibles, Investing, Sentiment

What Is the Right Amount of Cash In Your Portfolio?

  > My Sunday Washington Post Business Section column is out. This morning, we look at the question of How much cash should you hold in your portfolio?. This is yet another column  that looks like its about investing but really is about psychology.  As I noted prior, people have been sitting on big piles…Read More

Category: Apprenticed Investor, Asset Allocation, Investing

WaPo: Beware Bad Shopmas data!

> My Sunday Washington Post Business Section column is out. This morning, we look at the retail theater that is Black Friday:  Beware of bad Shopmas data! Here’s an excerpt from the column: “The news media aren’t any better. They breathlessly cover shopping as if it were an Olympic event. The big-box retailers play right…Read More

Category: Apprenticed Investor, Consumer Spending, Really, really bad calls, Retail

Use the News, Get the Most Out of Financial Media

Use the news: How to get the most out of financial media Barry Ritholtz Washington Post November 17 2013     Last time out, our topic was the signal-to-noise ratio when applied to investing. We looked at how to reduce the noise you consume in your daily information diet. The goal was to help you…Read More

Category: Apprenticed Investor, Financial Press, Investing

Active Fund Winners? Emerging Markets Small-Cap Funds

Twice a year, S&P releases a “SPIVA Scorecard” – a report comparing the performance of Active Managers versus three passive indices. The S&P 500 large caps, S&P MidCap 400, and S&P SmallCap 600 are pitted against the median returns of active managers. In the most recent report, the trailing 12 months returns for these indices…Read More

Category: Apprenticed Investor, Index/ETFs, Investing

How to Get More Signal . . .

    My Sunday Washington Post Business Section column is out. This morning, we look at the best ways to Use the News. As I noted last time out, its helpful to reduce your noise levels when it comes to investing. This go round the focus on getting more signal. For a change, I am…Read More

Category: Apprenticed Investor, Financial Press, Investing