{"id":1352,"date":"2008-12-31T08:00:33","date_gmt":"2008-12-31T13:00:33","guid":{"rendered":"http:\/\/www.thedisciplinedinvestor.com\/blog\/?p=1352"},"modified":"2016-09-20T16:59:30","modified_gmt":"2016-09-20T20:59:30","slug":"idiot-investing-losing-less-is-now-winning","status":"publish","type":"post","link":"https:\/\/thedisciplinedinvestor.com\/blog\/2008\/12\/31\/idiot-investing-losing-less-is-now-winning\/","title":{"rendered":"Idiot Investing: Paul B. Farrell says Losing is Winning"},"content":{"rendered":"

OK, you hit a nerve. I can’t hold back any longer simply biting my tongue. I apologize in advance.<\/p>\n

According to Paul B. Farrell, the money losing lemming of Marketwatch’s Lazy Portfolio strategy, \u00a0it is a good thing to do nothing with your investments as they lose and lose big…<\/p>\n

According to his latest brilliance<\/a>:<\/p>\n

\n
And it’s so simple and easy. No Wall Street. No active trading. No stock-picking. Just buy and hold a well-diversified portfolio of three to 11 low-cost no-load index funds, all based on the Nobel Prize-winning Modern Portfolio Theory.<\/div>\n<\/blockquote>\n

If that is not the most idiotic thing that I have heard in 2008, I don’t know what is. To actually come out and publicly boast that you have a winning strategy that entails no work and proud of the fact that you helped people lose more than 1\/3 to 1\/2 of their portfolio values takes some real nerve.<\/p>\n

(See how we manage portfolios HERE<\/strong><\/a>)<\/p>\n

What is it with these people anyway and why are they allowed to write such reckless dribble? I suppose that is is okay now to write about how easy it really is to work a Ponzi Scheme.<\/p>\n

Mr. Farell, here is an idea for your next article: The Ponzi Portfolio: Simple! No Office. No Boss. No Research. Just tell people they are making money over and over because of a secret formula, all based on the Bernie Madoff Theory of investing. (At least Bernie made gains for his investors, even though they were fake)<\/p>\n

And, you can keep telling everyone that you are beating the S&P, even though they are losing massive amounts of money. Ridiculous you say? No more than your Lazy Portfolio idea.<\/p>\n

The article goes on to show just how absurd this Lazy Portfolio is:<\/p>\n

So I asked the creators of the Lazy Portfolio what’s ahead. Well, nobody’s panicking: Not one is changing asset allocation for 2009.<\/p><\/blockquote>\n

Why change? If it is okay to lose 30% or so, what is the difference. Eventually they will get it right.<\/p>\n

It is all about the S&P 500. Why? Seriously… Why? How about the thought of beating the benchmark of ZERO. I thought the idea was to make money when we invest, not be satisfied with simply beating an arbitrary index.<\/p>\n

Yes, the Lazy Portfolios were down in 2008. But all eight Lazy Portfolios are beating the benchmark S&P 500 by anywhere from three to 18 percentage points. Plus the five-year averages for seven of the eight are in positive territory and the S&P 500 is not.<\/p><\/blockquote>\n

The real kicker (assuming you have not thrown up yet) is that the comparison is not apples to apples. \u00a0 While it is fine to look at the S&P 500 as a comparison of a portfolio based on equities, there are several funds in your portfolios that invest in fixed income. If you were to look at those in relation to the S&P 500, how would they have compared?<\/p>\n

Once again, a slight of hand to try to make their failure look good to an unsuspecting reader. Remember, even the 6’1″ fella looks short next to a 7’10” gent. It is all a matter of perspective.<\/p>\n

Mr. Farrell: RETIRE PLEASE!!!!! Then you can be lazy all day. Why should you work so hard at proving that you have found a winning formula, when you don’t?<\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

OK, you hit a nerve. I can’t hold back any longer simply biting my tongue. I apologize in advance. According to Paul B. Farrell, the money losing lemming of Marketwatch’s Lazy Portfolio strategy, \u00a0it is a good thing to do nothing with your investments as they lose and lose big… According to his latest brilliance: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[12,42],"tags":[481,483,490],"class_list":["post-1352","post","type-post","status-publish","format-standard","hentry","category-markets","category-stocks","tag-economy","tag-markets","tag-stocks","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"acf":[],"_links":{"self":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/1352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/comments?post=1352"}],"version-history":[{"count":0,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/1352\/revisions"}],"wp:attachment":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/media?parent=1352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/categories?post=1352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/tags?post=1352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}