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
Shayne Heffernan – Stop Lending Your Money to Friends
Brian Portnoy – Financial Wellbeing Is Your Gateway to a Meaningful Life
Tara LaFon Gooch – Vet Your Business Partners
Adrian Choo and Sze-Yen Chee – The Great Career Paradox
Litan Yahav – The Risk of Investing in Single-Family Rental Properties
Chris Do – Don’t Put Good Money After Bad
Cesar Hasselmann – Work Today on the Things You Want to See Happen
Michael Bungay Stanier – Find a Trusted Financial Advisor to Manage Your Investments
Robert Glover – Start Building a Wisdom Council When Young
Shil Shanghavi – Find Your Elite
Mike Michalowicz – Stay In Your Lane
John Talty – It’s OK to Move On to the Next Thing
Aaron Velky - Go Slow and Think Through an Investment Before You Commit
Sean Harper – Iterate Until You Come Up With a Good Market Fit
Cam F Awesome - Don’t Stop Chasing You’re Dream
Dudu Cearense – It’s Your Responsibility to Take Care of Your Money and Wealth
Kim Barrett - Check Your Capacity Before You Hire
Rick Jordan - Be Careful When Helping Friends
Conor Riley – Don’t Throw Good Money After Bad Money
Dave Clare – Don’t Buy Stuff to Band-aid Your Unhappiness
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