I have a soft spot for Barron’s Magazine, the investing weekly. When I was a kid my dad would always have a folded copy in his briefcase. A little over 13 years ago, when I decided I wanted to be a financial journalist, one of the first things I did was apply for a job at Barron’s. They weren’t hiring but I wound up writing a couple of dozen freelance pieces for them anyway.
I’m happy to say that they, or at least their book reviewer, have a soft spot for me too. The review that appeared of Heads I Win, Tails I Win was very flattering. I like how it starts:
Spencer Jakab comes off as a reluctant financial guru. You might expect a Wall Street Journal columnist and editor (Heard on the Street, Ahead of the Tape) to stress his investment prowess in a book on investing. But not until page 249 does Jakab confide that he rescued his mother’s stock portfolio from the dot-com bust of the early-2000s, persuading her to sell her Nasdaq-related holdings in the fall of 1999 and park the funds in “boring Treasury bonds.” Her circle of middle-age Hungarian immigrants ignored his advice and lived to regret it.
Anyway, read the whole thing and then read my book if you haven’t already.
My book was featured in a nice article by Ron Lieber in The New York Times. It starts out mentioning an alleged Fidelity Investments study that showed a surprising finding about investor success. Here’s a transcript from Business Insider of Jim O’Shaughnessy discussing it with Barry Ritholtz:
O’Shaughnessy: “Fidelity had done a study as to which accounts had done the best at Fidelity. And what they found was…”
Ritholtz: “They were dead.”
O’Shaughnessy: “…No, that’s close though! They were the accounts of people who forgot they had an account at Fidelity.”
Except, as Lieber found, the study had never been conducted. For what it’s worth, I bet that’s what they would have found since, as I note from two actual studies in the book, frequency of trading or even checking your brokerage account correlates negatively with returns. Rip Van Winkle would’ve been an awesome investor.
In addition to being a nice piece on investing, the article has a photo credit (the pic above) by none other than little old me – surely a first for a Wall Street Journal reporter in our rival paper! It’s a snapshot of my collection (well, part of it) of bad investment books that I mention in Chapter One.
This video, shot on the floor of the NYSE, aired the night before the book went on sale. It was with Michael Santoli, Sara Eiseon, and Bill Griffeth.
A nice article appeared today in Money Magazine by Kerry Close about my book: “5 Ways to Make Smarter Investing Decisions-By Outsmarting Yourself.”
Who doesn’t like a listicle? I’ll let you read it if you want, but here’s the intro:
The best thing you can do for your portfolio may be absolutely nothing.
A steady, mechanical approach to investing is a predominant theme throughout Heads I Win, Tails I Win, a new book released today by Wall Street Journal“Heard on the Street” writer and editor Spencer Jakab. The former Credit Suisse stock analyst emphasizes that the vast majority of investors are wired to think they’re better at making money than they actually are—and that we ignore all evidence to the contrary.
The solution? “Put into place a process that will stop you from sabotaging yourself,” Jakab recommended when we spoke to him this week. That means investing in a methodical—and even mechanical—way, rather than reacting to the ups and downs of the market and pundits predicting gloom and doom on TV.
Can’t wait to read my brilliant explanations of why people are such lousy investors and how you can get better in Heads I Win, Tails I Win? A sneak preview is now online and in print days before the book is available in stores.
It’s an adaptation of a chapter titled “The Seven Habits of Highly Ineffective Investors” and is one of the parts of the book I had the most fun writing. It’s also the only chapter of my book, or for that matter any investing book, that recounts an episode of “Leave it to Beaver.”
There will be other excerpts available around publication time but this one is the longest and also appears in a publication that readers of my book should check out (they should subscribe to The Wall Street Journal too, of course!).
The AAII Journal accepts no advertising and is published by the American Association of Individual Investors. This group provides a lot of good investor education and also publishes an interesting survey of its members that I mention elsewhere in the book.
Stay tuned – release day is July 12th!
I cover a lot of investing errors in my book (coming on July 12th), but, sadly, the list of mistakes is way too long to fit in 255 pages. An interesting one I overlooked was what Vanguard calls “the procrastination penalty.” Now this is a little different than the old chestnut you may have heard about the awesome advantage of starting to save money early. One variant goes like this:
A young person begins saving at age 21, socking away $2,500 a year in a tax-free account until she reaches 30, after which she never sets aside another penny. The money grows at 7% a year compounded. Her brother starts at age 31 and puts away money the same amount until age 70, earning an identical return. In other words, he saves four times as much in nominal terms. Even so, his late start sees a nest egg grow to “only” $534,000 which is a little less than the $553,000 earned by his sister.
The effect highlighted by Vanguard is more modest but also far easier to avoid. They looked at their own company’s data for when people make contributions to IRAs (individual retirement accounts). Not surprisingly, since the deadline for the preceding year is on tax day in April, that’s the most popular month by far. For example, one could have made a contribution as early as January 1st of 2015 or as late as this Monday, April 18, 2016.
The stock and bond markets don’t always go up so waiting will occasionally work to your advantage (as it would have in spades in tax year 2008, for example). In the long-run, though, markets tend to rise. That small delay compounds over a saver’s working years into a not-so-small difference. Vanguard takes the example of an investor who contributes the maximum $5,500 over 30 years on either January 1st or April 1st. The “early bird contributor” would, at a 4% rate of return after inflation, earn $158,967 while a procrastinator would earn just $143,467 or nearly 10% less.
“They’re selling like hotcakes” is probably stretching things a bit because, you know, hotcakes cost money. The galley copies of my book that I received a few weeks ago, on the other hand, are priced to move at zero.
To avoid any confusion, the actual book won’t be published until July 12, after which time it will be available everywhere as a hardcover or an e-book. After getting several rounds of “congratulations” on a Facebook photo of the galleys, I should point out that they are uncorrected proofs meant for:
- People who review books or interview authors (and if you’re one of those people and didn’t get one, don’t be shy about getting in touch); or
- people who are very close relatives or friends and who think it is really cool to have something produced by an actual publisher with my name on it; and/or
- People who can’t wait three months to do this (all of whom I think fall into that last category too).
I was pretty excited to hold one in my hand too. It’s also been nice to read some of the advance praise (I’ll create a link here later).