My Worst Investment Ever Podcast
Business:Investing
BIO: William Bernstein is a neurologist, a co-founder of Efficient Frontier Advisors – an investment management firm, and has written several titles on finance and economic history.
STORY: William lost money after investing in palladium futures under the belief that a couple of physicists had perfected the technique of cold fusion to get helium.
LEARNING: Never invest based on the headlines. Something that everyone knows isn’t worth knowing.
“Something that everyone knows has already been pounded into the market, so it isn’t worth knowing.”William Bernstein
Guest profile
William Bernstein is a neurologist, a co-founder of Efficient Frontier Advisors – an investment management firm, and has written several titles on finance and economic history. He has contributed to the peer-reviewed finance literature and has written for several national publications, including Money Magazine and The Wall Street Journal.
He has produced several finance titles and four volumes of history, The Birth of Plenty, A Splendid Exchange, Masters of the Word, and The Delusions of Crowds, about, respectively, the economic growth inflection of the early nineteenth century, the history of world trade, the effects of access to technology on human relations and politics, and the history and social psychology of mass manias. He was also the 2017 winner of the CFA Institute’s James R. Vertin Award.
Worst investment everAbout 35 years ago, a couple of physicists announced that they had perfected the technique of cold fusion, which enables you to take hydrogen atoms, smash them together, and get helium—the same thing that goes on in a hydrogen bomb. If that were the case, then it meant there was now a source of energy that was too cheap to meter. The limiting factor in that technique was palladium, which was the catalyst. So, palladium went from $100 to $400 an ounce. William thought it would be a good idea to buy palladium futures. He lost his money in that investment.
Lessons learnedStart slow, see how you react to the bear market, and find out your actual risk tolerance in the real world because there’s a big gap between talking to talk and walking the walk.
No.1 goal for the next 12 monthsWilliam’s number one goal for the next 12 months is to read good nonfiction books and then write reviews.
Parting words“Just keep buying.”William Bernstein
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Connect with William Bernstein
Further reading mentioned
Larry Swedroe – Beware of Idiosyncratic Risks
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David Siegel – Don’t Reduce Climate Change to a Score
Maxwell Nee – Never Get Too Attached to an Investment
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Cameron Herold – Unleash the Power of Your COO
Kim Scott – Don’t Always Accept Funding Just Because It’s Been Offered
ISMS 1 – The United States Won WW2.5, but Who Lost?
Peter Johnson – Pick the Right People to Work With
Morad Fiki – Don’t Partner With Someone Who Has Nothing to Lose
Drew Neisser – Be Real Estate Light
Rick Elmore – Your Entrepreneurial Journey Is the Dream
Lisa Gates – Someone’s Burdens Shouldn’t Be Yours
Ilise Benun – Ask Every Question You Can Think Of
Souniya Khurana – Own Your Narrative Regardless of What People Tell You
Michele Wucker – Don’t Ignore the Warning Signs
Anna Rosling Rönnlund – You Don’t Always Have to Buy a Home
Susan Frew – Trust but Verify All Your Employees
Ridhi Bahl – Your Health Is More Important Than Wealth
Will Basta – Step Outside of the Rat Race Box
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