USD, Gold, Spain and plunging exchange products (TVIX) in the latest things that make you go hmmm
Another great weekend reading by Grant Wiliams.
ETFs definitely provide
easy diversification, tax efficiency and low ex- penses to investors while offering the benefits of ordinary shares such as limit orders, short- selling and options markets BUT, the desire to entice investors into the market by making a cornucopia of investment opportunities to them through simple vehicles has led to a ‘dumbing- down’ of the investment process in a never- ending quest for the simplest possible route into an idea when the plain truth is, there ArE no substitutes for doing the necessary research required when thinking about investing money into something. The unevenness of the regula- tory regime surrounding these instruments has not exactly helped matters in that it has made investors believe that if they are allowed to do something, it must be safe.
The pejorative term ‘Videogame Generation’ is frequently aimed at the youth of the 90s and 00s who, it is alleged, sit in front of their TV screens mindlessly pushing buttons and pay-
ing no attention to the world around them. It is synonymous with a group of people who, it is felt, look for simplicity and convenience and cannot be bothered to engage with the world. It implies a certain amount of intellectual deser- tion on their part which, when one looks at the complexity of the games they are playing, is perhaps not justified.
If you have ever watched a rapt teen playing Guitar Hero or trying to infiltrate an enemy lair in Call of Duty, you will know, as i do, that these are extremely complex, hard to master and pro- vide enormous gratification to those successful in winning.
It used to be the same with investing, but now that too has been dumbed-down – a dangerous direction in which to go.
Full must read Hmmm Apr 01 2012