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Wall Street Steward Blog

The Biggest Loser

The next time you are in public, and the subject of investing rears its ugly head, listen closely.  Inevitably, there will be an obnoxious male bragging about buying a stock at $1 per share while watching it rise meteorically to $10.

You know the person….he is very annoying.  When I see this person, I am tempted to say “I knew Warren Buffett had chosen his successor, but did not know you would be attending this party.  He sure is lucky to have a genius like you teach him how to manage money.”

Instead of starting a fistfight, I usually just bite my tongue and nod, as the person spews his garbage.  Of course, I am thinking about my golf swing, or what my children are doing at the moment…anything to keep me from listening to this person.

Recently, at a public event, I was involved in such an exchange.  The “gentleman” was prattling on about how he was smart enough to invest in Australian currency, while his broker was dumb enough to sell him an investment that was inversely correlated to Treasury Bonds.  In English:  his broker thought that US Government Bonds (“Treasuries”) were overvalued and were due to drop, so he recommended an investment that would appreciate if that happened.

The man was the genius, his broker was dumb….at least that is the WAY he told it.

Instead of shaming this man to tears by illustrating how little he actually knew, I decided to take a different approach – I would lead with my biggest LOSER from the year to see how he reacted.  Took a deep breath and said:

“Mr. Tilson, congratulations on your phenomenal investment thesis…I’m sure Gordon Gekko himself would be proud. (had to throw SOME sarcasm in there, right?)  However, I also thought Treasuries were going to drop and sold them around that same time.  The “bond king” himself, Bill Gross, did the same thing and I am not nearly as smart as he is.  For those reasons, I cannot pile on while you obliterate your broker.  I would have done the same thing, and contrary to what you might believe, just because you pay us to be right does not mean we will be right all the time.”

Stunned silence.  Followed by “I have never heard one of you guys admit you made a bad trade….may I get a card?” 

Self deprecation….works every time. 

So, the next time a person is spouting off winners at the block party, tell him your biggest loser and watch his reaction.  At the very least, it will disarm the person, and they will pipe down.  Hey, if you’re lucky, maybe that person will believe that you have some credibility and hire you.

Hasn’t happened to me yet, but I’m sure he is too busy making billions day trading to call a chump like me.