Friday, January 14, 2005
Surprise!
Henry Blodget, once the poster child of the 'new economy' and Merill Lynch's star analyst and later defamed in fraud allegations, writes in his commentary for Slate.
The sad truth is that sound investment policy is boring. Diversify, reduce costs, aim to earn the market rate of return—even Stephen King would have trouble telling stories about that. But for the financial media to survive—at least the financial media devoted to helping you "profit" from reading/watching/listening—they have to suggest, over and over again, that there are exciting new places to put your money or dangerous places to remove it from. They have to tantalize you with the latest, greatest mutual funds or the "Ten Hot Stocks for 2005." They have to make you drool by observing, again and again, that every dollar invested in Microsoft's IPO in 1986 would be worth about $300 today. (Next time, it will be you!) They have to enumerate new ways to refinance your house, consolidate your debt, track your investments, pick better stocks, beat the pros, buy treasuries, retire rich, or make millions. They have to keep you watching, listening, and reading, or else they—not you, they—will go bankrupt.
What's surprising is not so much the commentary as much as the source! (Read Blodget's description of his career and potential conflicts of interests here.) Well, sounds like a man reformed blaming the system?
The sad truth is that sound investment policy is boring. Diversify, reduce costs, aim to earn the market rate of return—even Stephen King would have trouble telling stories about that. But for the financial media to survive—at least the financial media devoted to helping you "profit" from reading/watching/listening—they have to suggest, over and over again, that there are exciting new places to put your money or dangerous places to remove it from. They have to tantalize you with the latest, greatest mutual funds or the "Ten Hot Stocks for 2005." They have to make you drool by observing, again and again, that every dollar invested in Microsoft's IPO in 1986 would be worth about $300 today. (Next time, it will be you!) They have to enumerate new ways to refinance your house, consolidate your debt, track your investments, pick better stocks, beat the pros, buy treasuries, retire rich, or make millions. They have to keep you watching, listening, and reading, or else they—not you, they—will go bankrupt.
What's surprising is not so much the commentary as much as the source! (Read Blodget's description of his career and potential conflicts of interests here.) Well, sounds like a man reformed blaming the system?
