What Sounds Smarter?

Dave Hutchison, CFA |

Oscar-winning actor Jack Palance once said in a commercial for aftershave, “confidence is very sexy…don’t you think?”

But what’s even more “appealing” in the world of investing is…pessimism. I see so many “gloom and doom” sellers getting an audience.  It seems smarter to be critical.  And, news flash, it sells!

Even with all its problems, our media and free press is essential for our society to continue to function.  But they make money in the financial realm by focusing on short-term, negative events, encouraging a follow-the-leader mindset of buying what’s already prospered (akin to what investment author Thomas Phelps has compared to shooting where the rabbit was vs. where it will be).

And the biggest message of all, encouraged by their sponsors – it’s time to make a change, trade!  Don’t stick with what you’ve been doing!  [Copyright 2023 CNBC, all rights reserved].

It reminds me of our work and the gravitational pull that encourages an advisor to tell a client what they want to hear, vs. what they need to hear about their financial future and our best advice to them.

All I can say is, I’m confident (thanks Jack) in the future of business and intelligent investing.  No other system has proven more able to adapt and reward the innovator than the free market system.

 Because the incentives to do so are present (nothing is more powerful than aligned incentives).