More on Name Brands

By: Reggie Middleton | Wed, Oct 15, 2008
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This is a message from a commenter on another site. Thought I'd pass it on:

Dear Reggie:

Ignore the naysayers and the bashers. They are everywhere. As the saying goes "Dogs bark but the heaven doesn't care!'

I do have a question fo you. What I am interested right now is charting a course of investment action in this very difficult marketplace. When Warren Buffett picked up sizeable investments in GE and GS I figured here is a reknowned investor trying to tell us it is OK to invest in this market for high future returns. And then I watch Jim Rogers who wants to hang all our Fed officials and politicians for destroyong our economy and one who predicts end of the U.S. economy and U.S. dominance of world market and predicts runaway hyper inflation. Buffett is saying "Go ahead, invest in equities.." and Jim Rogers saying "Buy tons of gold and secure foreign currencies and short everything U.S..."

Where in the blog have you given direction to investors with regards to this conficiting scenario? Appreciate your help.

Reply:

Thanks. I have tried to shy away from actually giving investment advice, with the specter of the hedge fund being part of the cause. Since that is no longer an issue, I may be freer of tongue, but I am still no giver of advice. I try to encourage everyone to do their own homework, using my blog as a giant cheat sheet, so to say.

Doing your own homework is quite important, for although quoting name brands makes for profitable media fodder, it doesn't do well for investors - contrary to popular opinion. See the links at the bottom of this post and be sure to read the comments as well.

Name brands are just that, name brands. Some are good investors who make a lot of money investing, others are good marketers who make a lot of money marketing. Buffet's last investment banking foray cost him a fortune in headaches, money and resources. His track record in that arena is not good. Now if he took the big stake in an industrial...

There are many unknown investors who have trounced the name brands for a decade or more (I won't say more on this), you just wouldn't know who they are because they are unknown.

Taking investment advice from Rogers or Buffet, or the media darlings without empirically quantifying their risk adjusted success is the same as paying $215 for name brand sneakers - you are being hoodwinked by the marketing machine.I am not saying who is a good investor or who is not, but following blindly due to name branding will put you in the poor house, whether it is buying sneakers, stocks or commodities.

 

 


 

Reggie Middleton

Author: Reggie Middleton

Reggie Middleton
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