Trade Ideas Blog

Fake news is more complicated than you think

Feb 21, 2017

Fake news is more complicated than you think, and it’s not only made up stories related to politics. Fake News is all over the financial markets as well. Let’s start with “Buy and Hold.” This meme has been perpetuated for decades with only one simple goal. Let somebody else do your investing for you and charge you fees to do it.

“You can’t make money in the stock market.” — this example of fake news has been written about ad nauseum and again only serves one purpose — to get you to give your money to so called “experts.”

I am reading all sorts of articles about robo-investing and Automated Portfolio Adaptation, and when you read between the lines you just start to notice this one glaring thing: nobody is actually talking about stocks. It is as though the notion of doing some research and selecting a stock is so difficult it must not even be mentioned by name.

Now, let’s dive just a little bit deeper. The broken U.S. tax structure, complicated beyond anyone’s capability to fix it is designed to punish you for changing your mind about a stock purchase. On the one hand it almost sounds like it makes sense — encourage investment and discourage speculation. It seems to make sense right? WRONG! It does the opposite. Consider first that in life we are born and bred to speculate. You speculate the moment you wake up in the morning. As you drive to work in a speeding motorized chariot you are in full speculation mode, working to make sure you don’t kill yourself.

Cat picks stocks

Today, information is being digested and disseminated at a speed that makes flexibility a must. If you want to be a leader in the world going forward you MUST MAKE IT EASIER for people to SPECULATE in stocks. This is what fosters ingenuity and creativity and any company being listed should be able to withstand forces of legitimate speculation. That is the nature of the game.

Today we are in Bizzaro World. You pay 50% short term capital gains tax. The industry pushes you to give your money to Experts that have no better understanding of stock behavior than a cat on YouTube.