My Worst Investment Ever Podcast
Business:Investing
In this episode of Investment Strategy Made Simple (ISMS), Dave joins Andrew again as he shares more about his good and bad investments, among other things.
“Most of the books I read that helped me invest are not about investing but about history.”Dave Collum
Listen to Dave’s previous interview Ep660: What Should the US Be Doing in Ukraine? He shares his views about the UK, the US, and what the US should do about Ukraine.
Dave’s early investment journeyIn 1980, when Dave started investing, it was nothing but bonds because interest rates were humongous, and investors could get a great return. Dave didn’t know what he was doing. He just depended on recency bias to make his investment decisions. Luckily, the bonds did great. After the 1987 crash in equities, Dave found himself sitting in the faculty lounge with an old guy who convinced him to buy equities. He looked into it, liked the idea, went in, and flipped equities. Dave was in equities until the mid-90s when he got enthusiastic after starting to accrue some wealth and was very bullish.
Dave had a contact who was a traveling pharma salesman who would tell him what all the CEOs and staff were telling him. The connection had good information and gave Dave some ideas, one of which was a small company in Mississippi. The company did well and started acquiring everything under the sun.
In early 1998, Dave started getting a little queasy about the markets because he’d read enough books now and better understood investing. At the beginning of July 1998, Dave emptied half of his equities. Then the economy went right into the Asian crisis. At this point, Dave had dumped everything and made 700%, and everything had worked great. So he thought he was a genius.
Dave then got into gold. He had no clue what he was doing and simply white-knuckled gold for two years. Prices went from $256 to $1,900 at one point. Energy soared, too, and the decade following the tech boom was Dave’s best decade relative to the world. While the world was getting pounded by two nasty bear markets, Dave compounded 13% a year—that was extraordinary.
Dave’s recommendationsDave recommends reading history books to understand investing. He highly recommends The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War.
Andrew’s takeawaysDave Collum is a professor of Organic Chemistry at Cornell University who developed an interest in markets, which, in turn, led to an interest in geopolitics. He enjoys the human folly of it all. He has a natural predilection for being contrarian, which makes him a “denier” on almost all hot topics.
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Connect with Dave Collum
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Jason Brown – You Never Go Broke Taking a Profit
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Kenny Rose – Don’t Invest in Anything You’re Not Fully Educated In
ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
Chong Ser Jing – Pay Attention to What Drives Business Results
James M. Dahle – Don’t Buy More Insurance Than You Need
Harley Bassman – Sizing Is More Important Than Entry Level
Mike Philbrick – Just Because You’re Winning Doesn’t Mean You’re Smart
Sam Burns – Understand What You’re Really Betting On
Jay Pelosky – You Can Be Right but at the Wrong Time
Reuben Mattinson – Have Solid Proof That Trading Is Happening and It’s Regulated
Jerry Parker – Understand Your Investing Capabilities and Limitations
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William Cohan – Get the Numbers Right Before You Invest
Neil Johnson – Take the Profit When You Can
Jeremy Deal – Use Differentiated Insight to Evaluate an Investment
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