My mother is the ultimate stereotypical mom. All the obvious stuff like loving her family, nurturing, strong, etc…
She does the typical mom things like having lunch with her friends, gossiping, making plans and watching the same shows all mothers watch in the morning and evening.
This is where the secret sauce is. She’s as typical as millions of other “people” which translates to other “investors.”
You see mom has never really been too involved in my parents investing decisions. My father made most of the decision, so he bought a few Dow stocks just following the stone ages. That served them well, then I took over so they could enjoy their golden years without worrying about where the next early bird dinner was coming from.
Mom worked for many years and accumulated “her own” money. I am the only person in the family that is allowed to know how much she has, and I would never betray that trust.
Here’s the rub
From time to time she’ll come to me with the desire to make her own investment decision. For example she wanted to buy Facebook when the IPO happened. She wanted to buy Apple after she figured out how to use her iphone. And so on. Those were both smart decisions from a long term perspective. (she no longer owns either…)
Some of the more memorable ideas were the ones that looked like this. In 1999 she said, “David, should we buy some of those internet stocks?” or in 2006, “David, maybe your father and I should buy some rental property, what do you think?”, then in 2007 she said, “David, maybe we shouldn’t have so many municipal bonds and we should own more stocks.”
I don’t blame her for asking questions. Frankly, I’m glad she does. What I’ve tried to point out to her 374 times is where this information is coming from. It comes via Good Morning America, The 6 O’Clock news, her friends and who knows where else.
These people don’t know anything except what’s hot right now. They’re all part of the herd who comes in last after all the profits have been seized by the pros in whatever investment is being talked about at the time.
Well, today was one of those times.
Mom called and said, “David, they say the economy is getting better and since bond rates are so low, we should be buying stocks because the market is going to keep going higher this year.”
I can’t say today will mark any day of importance in the stock market. I can say that based my mothers impeccable record, the market is close to a correction.
Doing the opposite at the crescendo of what the mainstream investing public is doing would be called contrarian investing. I sometimes call it intuitive.
How do you know when the crescendo is upon us? You’ll have to get to know my mother.
and the market recap video below…