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
William Bernstein – Never Invest Based on the Headlines
ISMS 32: 5 Signs of Impending Recession
ISMS 31: Global CPI saw 2nd MoM uptick in August
Swen Lorenz – Carefully Consider Liquidity in Your Portfolio
Paul Merriman – What You Do When You Are Young, Is Golden
Vikram Mansharamani – Liquidity Will Not Always Be There
Gino Barbaro – Buy Right, Finance Right and Manage Right
Robin Wigglesworth – You Can’t Outsmart the Markets
Sheryl Garratt – Shove Your Ideas Out There and See What Happens
Kim Ades – Slow It Down
Nick Hutchison – Have a Proof of Concept Before You Dive Into the Big Idea
ISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?
Laurie Barkman – Quit Often Quit Fast
Mark Venables – Do Your Best to Secure Your Crypto
Tania Reif – You Can Be Right and Lose Money
Mark Neuman – Constrained Capital and ESG Orphans
Ryan Dusick – Invest Yourself in Something That’s Meaningful
Thomas Chua – Have a Proper Sell Thesis When Investing
Kat Merchant – Do It Today
Laurent Lequeu – Sizing Is Crucial When Trading
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