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
Laurens Swinkels – Stay Liquid Even When Investing Long-Term
Spencer Jakab – Don’t Take Investment Tips from People
Charles Rotblut – Realize When You’re Lucky and Walk Away
Arjun Murti – You’ve Got to Get Out of the Battle At Some Point
ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
Steven Wilkinson – Your Success Is 100% Dependent on You
Shawn O'Malley – Geopolitics Can Take Your Investment to Zero
Peter Saddington – I Got Fired From My Own Company
Neville Medhora – Hot Stock Tips Are Generally Unreliable
Jack Farley – Don’t Play in Markets You Don’t Know
Carter Malloy – Valuation Is Not a Reason to Invest
ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
Gisela Hausmann – Encourage and Appreciate Your Employees’ Creativity
Connor Steinbrook – Do Due Diligence Before Visiting a Real Estate Property
Zachary Resnick – Invest in People Not Just Ideas
Chris Mamula – Take Responsibility for Your Financial Situation
Michael Howell – Liquidity Is the Main Driver of Asset Markets
Brady Slack – What to Look For in a Coach or Mentor
Richard Lawrence – Avoid the Stock That’s the Hype of the Day
Vineer Bhansali – You Create Real Value by Being Different
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