Would you like some fries with that investment?
April 28, 2008
In business, three of the most important words to remember are, “compared to what?” Your services are very expensive… really, compared to what? You’re doing very poorly in this area… compared to what? We’re doing very well in this area… compared to what? You get the gist of it, I’m sure.
Same storyline applies to newsletter writers. It does get a little tiring to witness the same attacks over and over again.
When folks on the bulletin boards take a swing at people like Bob Moriarty or Doug Casey or Greg McCoach, or whomever, I wonder about the context of their negative appraisal of skills in picking winners. Compared to what, I ask? I wonder if they’ve made a meaningful comparison of success rates against the ‘dart board’ technique used by too many investors. I keep hearing (though I personally haven’t done the legwork to validate this thought) that only one or two in a thousand among the juniors generates a winner. So… if Moriarty can point to a better hit rate than that, does he have something to offer? Yes? No? Maybe? I guess that all depends on your context. If you have other better sources of input, including your own personal skill, perhaps less so. If you haven’t the first clue, perhaps more so. I should say that I also have not conducted a tracking of Bob Moriarty’s record, dating back to Novagold… gee, that one hit already places him ahead of pure chance, doesn’t it?
How many times have we read Mr. Moriarty’s words to “do your own due diligence”? How many times did we read the same coming from the recently retired Bob Bishop? Here’s the kicker – how many times have we completely disregarded this admonition, and carried on with our investments as if just having read the gospel? Too many, I suspect. Do you think they didn’t mean it when they said, “do your own due diligence”? Having met both Bobs and having discussed the issue with each, I can tell you that they meant every word of it. Neither man placed himself in a position of omniscience, issuing decrees as if you were to be held free and clear of any responsibility for your own personal investments.
Do they hope to add value to your consideration of this very risky market? Absolutely! Do they absolve you of your own duty to do some homework? Absolutely not! If it were all so easy, they’d both be billionaires and we’d all remain as mushrooms, sitting in the dark, consuming you-know-what all day. Those who know don’t say. Those who don’t know can’t be shut up… that goes doubly for posters on bulletin boards.
As I see it (for what it’s worth), the task of a newsletter writer in this market is to draw attention to potential up and coming juniors as investment opportunities. The task then falls to you. I’m sure that Bob Bishop got tired of people holding him responsible for their own lack of willingness to do some basic homework. I’m sure of this because he told me so. I’m sure that Bob Moriarty is tired of people holding him to reviews he wrote years before, when circumstances have dramatically changed in the intervening period. I’m sure of this, because he told me so… as in, having someone complain about his Novagold recommendation not having withstood the test of time, as it fell to under $6.00… this despite the facts that he recommended it at under a dollar, and that it had since risen to above $20.00.
These guys do some of the homework, conduct an appraisal of an opportunity, then share their thoughts, for what it’s worth. Then it’s your job to further improve the odds. If one in a thousand is the pure chance outcome, and they can improve that to one in a hundred, maybe your own work can better that to one in ten, or if you work really hard, and have applied your brainpower well, maybe one in five. If so, that may give you a successful net outcome. In the end, let’s not assign the full responsibility to newsletter writers, by any stretch. Anybody who gets into that business must be absolutely out of touch with reality.
Case in point. I did not invest in Southern Arc because of Bob Moriarty. I will say, though, that his write-ups intrigued me to stay in long enough to conduct my own research, and I am more than comfortable in thanking him for that. As a dedicated self-determinist, I am in no way prepared to give over to someone else the controls necessary for my successes and failures in life. Whether they be successes or failures, they’re mine, and that’s the way I want it. Anyone who assigns this responsibility to others is automatically saying, “This part of my life is in your hands. You’re in charge.” I should say that, as soon as you do this, in my book, you lose the right to complain about outcomes. Until you reclaim your responsibilities, and do your own homework, you have no right to complain. Do the job and it’s yours. Don’t do it, and pay the consequences. Most importantly, you’ve given it over to people who do not (generally) ask for the entire job. So few people get this point that I’m left in need of a neck brace from shaking my head. Too regularly, I come across people who appear to spend as much time debating between a Big Mac and a Quarter Pounder as they do in researching their investments.
Those who have not done their own homework will blame others for their failed investments, time and again. I much prefer to do my own homework. In the event that I’m wrong in my investment choices, I’m entirely comfortable with my own hand in the process. In the event that I’m correct, I’m entirely comfortable with my own hand in the process.
When I see repeated attacks on the success rates of newsletter writers, I’m compelled to ask, “Then, why do you read them?” I’m reminded of my (Russian) wife’s description of life back home. People complained (in whispers only) for 75 years about the command economy of the Kremlin, but when it fell apart, the first cries were for someone to take over and tell them what to do. Some people crave for someone to just tell them what to do… then complain ad infinitum when they don’t like being told what to do. Can’t have it both ways.
Regards,
Kevin