Be careful about opening the mouth of a financial advisor, stock broker and so on. Unlike a Pez, that is not candy that is about to come out of their mouths.
When I look back, it is in utter amazement at the number of false statements I have been subjected to by financial advisors and even friends. Its an important conclusion when one understands that almost no one, including the experts understand economics or forecasting. Even the most high status Wall Street financial advisor is mostly useless because they work for institutions that follow the pack and are so focused on short term gains that they can not see the forest from the trees. The greatest evidence for this is the most recent financial crisis where all the major Wall Street firms, and many of banks went off the proverbial cliff due to short term incentives.
Financial types can’t see past their next bonus much less the future. People get into this field because they are greedy. That should not be terribly shocking.
Magazines such as Forbes and Fortune take so much advertising that their objectivity is seriously compromised. So who to listen to? I have found several sources, which I have lauded a number of times in this blog, but which I have been surprisingly unable to get friends and acquaintances to read.
Why to people continue to gravitate to corrupt information sources long after they have been proven incorrect in their assertions. Need I remind anyone, Fortune awarded Enron its Most Innovative Company in America Award 6 years in a row. Regardless of past performance, people continue to quote information from these sources to me. It is almost as if no one keeps track.
Generally, I have told people I know about the best sources for financial information, and they are free and easy to find on the internet.
They are:
1. CEPR
2. Dollars and Sense Magazine
3. Michael Hudson
I don’t have to study very hard (although I did study the real estate bubble, but came to same conclusion that CEPR came to but with more rigorous methods) and now forecasting is easy. That is long term forecasting, I don’t believe anyone can say when a particular event is going to happen. However, if you look to the long term, then the specific event date is not all that important. I simply go with these sources, who have yet to be wrong. However, I am still asked what I think about this or that statement made by various corrupt sources such as BusinessWeek or Goldman Sachs.
but on most things I ask “what have my sources written on the topic.” So most of the time I end up contradicting what BusinessWeek or Fortune or Mad Money say based upon the longer term rigorous work of my three sources.
I don’t know what the reticence is to leverage proven resources. I stopped considering the opinion of television or people I know because it was bad for my finances. Most people have absolutely no idea what they are talking about when it comes to the economy, and are primarily repeating things they heard from corrupt information sources. Its like a a Pez dispenser when people talk about projections or investments, except instead a little piece of candy that comes out when they open their mouths, its a little piece of excrement. The financial “professionals” are the absolute worst, primarily because they are on the take, but secondly because most of them don’t understand economics. However it does not come down to simply understanding economics. If you are an economist with three letters after your name that shows academic performance, however, if you work for Wall Street, your PhD is now useless as a signal of quality because you have a very dark master.
______________________________________________
Larry Summers has a PhD in economics, and from a fancy university also. However, if you see this sleazebucket speaking on television cover up the television with something or turn it off. Larry Summers is in the back pocket of big Wall Street money, yet someone also holds a position in the the Obama Administration. This brings us to the next topic…
This is my all accounts a very decent man with an excellent legal mind and strong moral foundation. However, in the area of economics he is out of his depth. He has appointed some of the biggest corrupt sleazbags such as Larry Summers, but also Tim Geithner and many others. His ineptitude in selecting the right people has cost us collectively trillions of dollars. Thus its not enough to have economics knowledge or to not be corrupt, rather in order to be an authority worthy of listening to, you need to be both.
________________________________________________
How False Information is Repeated
However, friends and family are just as dangerous because they repeat false statements that they have read or seen from corrupt information sources. The financial illiteracy and propaganazition is so powerful that I literally will not discuss investments with anyone except people I cam close to primarily because I don’t want to listen to a restatement of information that has not been critically analyzed and originated from a corrupt source. Eradicating poor information sources greatly cuts down on my mental effort and allows me to better allocate my time.
