The Big Picture for the Week of February 27, 2005

What a great week! I had all sorts of thing in the market working very well. Time to get excited and buy more, a lot more!

If you have read this blog for very long you probably know I don't mean that. I've written several times about using logic to make decisions, not emotions. Trying to trade these little ranges we have had is not the right thing for most investors (as opposed to traders).

The market clearly has some wind in its sails, but another South Korean-sell the dollar story could easily take the market back down a couple of percent at any time. There's nothing wrong with being happy with an up week but, despite what some of the TV folks are saying this weekend, not much had changed since a week ago, has it?

Ben Stein has an interesting article in the NY Times this morning that I would encourage you to read.

There are a couple of great points that I would that I would address. First he says that there are no TV shows that teach people how to be better investors. I think recently CNBC has tried to change this but they are not there yet. Fox has its moments of gleaning process from people which is very constructive but I think they may be able to do more when they start their new channel.

I write a lot about CNBC Asia and Europe. These channels have great content but I think it is more pointed to professionals. Any time I appear on CNBC Asia a friend, neighbor, client or my wife will tell me they had no idea what I was talking about yet I get asked back all the time, point being jargon is welcomed. When I was on Fox news in December they wanted me to avoid jargon, which I think I did. After those appearances no one I know was confused by my comments.

Between the two Fox shows I basically said four things. One stock I picked is down 5%, after being up 5%, the other stock I picked is up 13%. I also said oil would go back up to the mid to high $40's quickly and that we would have a rally through the end of the year but I wasn't very optimistic for 2005. By my reckoning I went 3 for 4 but to Mr. Stein's point did I help anyone watching become a better investor? Doubtful.

There are two TV shows that I can think of that sort of delve into process, helping people become better investors. First is any of the holiday programming on Bloomberg TV. They typically air 30 minute segments with three people from the industry. And despite consistently painful interruptions from Brian Sullivan I learn a lot. I also think Cashin' In on Fox delves into process very well too. Take this week's comments by Jonas about gold. I think he's missing a few things but he did spell out a clear argument. Lastly Jimmy Rogers offers plenty of insightful nuggets anywhere he appears.

Mr. Stein also talks about his process for investing. He does not try to pick stocks, he writes. He refers to himself as a singles hitter. He also talks about using different types of funds to build the right allocation for when you have accumulated some investable assets. Keeping it simple is something I believe in wholeheartedly and write about often. TV's weakness of not making better investors can be the blogosphere's potential strength. One of the reasons I have this is to try to help people empower themselves to become better investors ( I write this so often I might be losing readers). Some of what I have written is very simple stuff that anyone can do, some of my posts have been sort of middle of the road in terms of complexity and some of the posts have expressed every bit of brain power I have. The hope being there's a little bit for everyone.

I do not agree with Mr. Stein's fund only approach. I think a mix of many different types of tools can be easily managed by most people and still be simple. This is the empowerment aspect that I refer to. You can be a singles hitter by having a couple of ETFs, some individual stocks and a couple of other tools. For example over the last 34 years (the extent of Bigcharts.com's data base) Anheuser Busch (BUD) has trounced the S+P 500 and the Morgan Stanley Consumer Index (CMR) and paid a dividend. How sophisticated of an investor do you need to be to pick Bud? To be clear, I have no interest in the stock and no plans to buy it but this is not a complicated pick and it was the first one I thought for this example. Trying to figure out whether some biotech company will get FDA approval can be a little trickier.

I also don't think keep it simple means pick a strategy today, then grow old with it and never change a thing. I don't think that is what Mr. Stein is saying but I could see where someone might infer that.

Keep it simple but keep it evolving.