I know it is confusing. If it were easy, everybody would do it. The effort to successfully manage your financial affairs is an ongoing, laborious task. Unfortunately, much success in the world of investing is a zero sum game. In order for there to be a winner, there must be a loser. Though when you “win” you typically don’t know who “lost”. But we accept that it is simply the nature of capitalism. If we all had exactly the same information about an investment there is a natural tendency for that knowledge to lose value over time. In fact, if everyone has all of anything it has no option but to lose its economic value. For example, if everyone wants a tulip bulb, and there are a limited number of them-their value could increase. Conversely, if everyone has access to an unlimited number of them, they become virtually worthless. Thankfully, in our economic system we all differ in terms of goals, objectives, desires, risk tolerance, time horizons, etc., etc. The things that we treasure are different. So there really is enough to go around, even though there will always be a lopsided distribution of wealth. In the investing universe he/she who has the correct information at the right time and acts/or refrains from acting has an edge on the pursuit of material gain. Therefore, the search for everyone’s “best ideas” continues.
To minimize the risk of losing money-or perhaps to increase the odds of making it we tend to gather information from sources we deem to be credible. As I often state, there is no shortage of information or opinions floating around. This week I found my daily “early morning” standby, Adam Crisafulli and his Vital Knowledge team to have the most compelling thoughts. He has looked at investment conditions through both an optimistic and pessimistic lens. His intent is to be thorough, and then weigh in on which path he sees as the most likely to occur going forward. I will attempt to summarize his thoughts.
For every winner there must be a loser
