Sunday, January 22, 2012

What's In a Name?

The problem with doing idiotic things, I have discovered, is at the time, they seem really smart.

So, when time came for me to join stocktwits, I thought, "Hey, why not just use my normal twitter handle? After all, that's just efficient." You know, much the same way as having just one kidney is efficient.

See? Real smrt.

Over time, as my stocktwits stream evolved to where I was posting live entries and exits, my twitter stream was forcibly exposed to my market activities. This led inevitably to the question most traders are subjected to at what few social gatherings we manage to stumble to: "Hey man, I've saved a little money, what should I buy?"

I found myself unable to answer the question. After all, I am in no way a financial advisor. Additionally, since this conversation invariably came up before we had eaten, my ideas tended towards short-term purchases of rapidly depreciating assets. Like burgers. Or hot dogs. (I like hot dogs.)

I was ruminating over this limitation over lunch today when I stumbled across Kyle Metivier's latest brilliant brain-dripping. Kyle names his portfolios. As he correctly points out, unlike the banal and irrelevant act of naming a newborn, the Naming of a portfolio is Important.

I thought back to my dinner-time conversations, and as with most of my conversations, came up with what I should have said well after the fact. Portfolios aren't hard to generate. You just have to name them first.

The Hipster 
"I had a stock like that last year... it's pretty obscure, you've probably never heard of it."
Apple (AAPL); Silicon Graphics (SGI); Urban Outfitters (URBN); Pandora (P); SAB Miller (LON:SAB)

"Every stock is sacred, every stock is great. If a stock is wasted, God gets quite irate."
 Apple (AAPL), Google (GOOG), Intuitive Surgical (ISRG), Panrea Bread (PNRA), Whole Foods (WFM)

The Dude 
"The Stock abides. I don't know about you, but I take comfort in that."
 Altria (MO), Microsoft (MSFT), Diego (LON:DGE), Stewart Enterprises (STEI)

The Burnout Parent 
"Brokerage? Account? Do they do layaway?"

I could really do this for hours.

I hope to the Flying Spaghetti Monster that no one takes any of this as investment advice. It isn't, any more than stock picks over dinner should be. Asking someone else to do your stock picking for you, then blindly following their recommendation is a great way to lose money, and possibly lose friends, or, at the very least, folks you can have dinner with.

There are far better questions to ask. If you're just getting started, as so many of my friends seem to be, then instead of asking which stocks to invest in, invest in learning which questions to ask. Start by reading some of the great blogs out there targeted at managing your own money.

Yes, it's a boring subject. Yes, it's not easy to learn. And yes...'re probably easily distracted.

Sure, it's not easy. Neither was driving when you first started learning which pedal the clutch was. But you had an incentive. The thought of helping your prom date off the handlebars, bicycle bell a-chingin', was probably petrifying. For some reason, retiring with a portfolio filled with Enron and Fannie Mae stock seems less terrifying. I'm not sure why this is, but the reason is probably depressing.

Fortunately, finding incentive in the world of finance is easy. I personally recommend blogs with personality. The truth is, the world of finance is full of wonders and miracles but man takes his little hand and covers his eyes and sees nothing. Check out Kyle's blog, which is a great introduction to the world of finance. Josh and Barry run more general finance blogs, and they're not scared of getting technical.

A word of caution, reflective of my biases: personally, I would avoid Zerohedge et al, who, despite being some of the most talented writers and number crunchers in the biz, have been bearish for over five hundred S&P points. That sort of thing is a no-no in my book, since sitting in cash during one of the greatest bull-runs in history makes for a painful retirement plan. (If you're looking for great questions to ask, however, they do provide an excellent sampling.)

So, future dinner company, I implore you: don't make me pick a portfolio for you, especially before dinner. Pop open a blog, do some reading, and ask better questions.

Otherwise, I'm going to recommend hotdogs. I do like them hotdogs.

1 comment:

  1. Hope the meal was as delicious as my brain drippings. Unfortunately, I was reading most of this while driving to Starbucks, being forced to listen to Peter Bjorn & John, so now I suddenly feel dangerous and gay.
    But a great point was made about the thought process involved in making even the most silly decisions. Otherwise, my Stocktwits "name" would be wicked cool, like "GuyWithNoDragonTattoo" or something like that.
    Let's just hope Foster the People doesn't come on the radio (long $SIRI), or else I will purposely steer this vehicle into a telephone po