Debunkery Learn It, Do It, and Profit from It -- Seeing Through Wall Street's Money-Killing Myths

by Fisher, Kenneth L.; Hoffmans, Lara W.

• ISBN13: 9780470285350
• ISBN10: 0470285354
• Edition: 1st
• Format: Hardcover
• Copyright: 2010-10-05
• Publisher: Wiley

Summary

Want to become a better investor? Send your spouse on a shopping spree! It's no joke-this book shows you why.Far too many investors fail to get the results they want because they make some pretty common mistakes. The problem is, the errors don't seem like mistakes-they seem like smart, intuitive, and/or widely recognized investing "wisdom." But much of what's accepted as investing "wisdom" is, instead, bunk. How can investors tell bunk from reality?Debunkery: Learn It, Do It, and Profit From It-Seeing Through Wall Street's Money-Killing Myths from legendary money manager, longtime Forbes columnist, and best-selling author Ken Fisher shows you how to avoid the costly errors many investors make when they rely upon "common sense" thinking, intuition, gut instinct, or clich_s-by using debunkery! Debunkery isn't difficult-it just requires the willingness to flip common investing "wisdom" on its head. Once readers learn to do that, they can begin seeing the investing world more clearly and stop falling prey to costly bunk.Fisher demonstrates debunkery on 50 of Wall Street's widely accepted "truths," and details in an easily accessible (and always entertaining) way why: Stop-losses could be renamed stop-gains. High unemployment isn't bad for stocks. Massive trade deficits can be great for stocks. Stocks don't care if the US dollar is strong or weak. Most retirees have a long, long time to invest. You should never listen to your "gut" when it comes to investing. You are almost certainly too terrified of government debt. Consumer confidence doesn't matter. Sending your spouse on a shopping spree could get you better long-term investing results.In investing, there are no simple rules that say, "always sell on this one condition, and buy on that one," that work consistently and repeatedly. If only investing were that easy!Debunkery shows you why many Wall Street "truths" are, in reality, money-killing myths and walks you through ways you can begin improving your error rate right away. Debunkery debunks 50 common myths, but also gives you the tools to continue engaging in debunkery for the rest of your investing career.

Author Biography

KEN FISHER is best known for his prestigious "Portfolio Strategy" column in Forbes magazine, where his over 25-year tenure of high-profile calls makes him the fourth longest-running columnist in Forbes's 90-plus year history. He is the founder, Chairman, and CEO of Fisher Investments, an independent global money management firm with over $32 billion under management (as of 6/30/10). Fisher is ranked #289 on the 2009 Forbes 400 list of richest Americans, and #721 on the 2010 Forbes Global Billionaire list. In 2010, Investment Advisor magazine named him as one of the 30 most influential individuals of the last three decades. Fisher has authored numerous professional and scholarly articles, including the award-winning article, "Cognitive Biases in Market Forecasting," and has published six previous books, including the New York Times and the Wall Street Journal bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, and How to Smell a Rat, all of which are published by Wiley. Fisher has been published, interviewed, and/or written about in many major American, British, and German finance or business periodicals. He has a weekly column in Focus Money, Germany's leading weekly finance and business magazine.

LARA HOFFMANS is a content manager at Fisher Investments, a contributing editor of MarketMinder.com, and coauthor of the bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, and How to Smell a Rat.

Table of Contents

Acknowledgments	p. ix
Introduction: Debunkery Made Easy	p. xiii
Basic Bunk to Make You Broke	p. 1
Bonds Are Safer Than Stocks	p. 5
Well-Rested Investors Are Better Investors	p. 9
Retirees Must Be Conservative	p. 13
Age Equals Asset Allocation	p. 17
You Should Expect Average Returns	p. 20
"Capital Preservation and Growth" Is Possible!	p. 23
Trust Your Gut	p. 26
One Big Bear and You're Done	p. 30
Make Sure It's a Bull Before Diving In	p. 34
Growth Is Best for All Time. No, Value, No, Small Caps	p. 39
A Good Con Artist Is Hard to Spot	p. 44
Wall Street "Wisdom"	p. 49
Stop-Losses Stop Losses!	p. 51
Covered Calls...Gotcha Covered	p. 54
Dollar Cost Averaging-Lower Risk, Better Returns	p. 57
Variable Annuities Are All Upside, No Downside	p. 60
Equity-Indexed Annuities-Better Than Normal Annuities	p. 65
Passive Investing Is Easy	p. 68
Do Better With Mutual Funds by Sending Your Spouse on a Shopping Spree	p. 72
Beta Measures Risk	p. 75
Equity Risk Premiums-Forecasting Future Returns With Ease	p. 80
When the VIX Is High, It's Time to Buy	p. 84
Be Confident on Consumer Confidence	p. 88
All Hail the Mighty Dow!	p. 92
"Everyone Knows"	p. 99
So Goes January	p. 101
Sell in May	p. 104
Low P/Es Mean Low Risk	p. 107
A Strong Dollar Is Super	p. 112
Don't Fight the Fed	p. 116
Interest Pays Dividends	p. 120
Buy a 5% CD for 5% Cash Flow-Easy!	p. 123
Baby Boomers Retire, World Ends, Etc.	p. 126
Concentrate to Build Wealth	p. 130
History Lessons	p. 135
Pray for Budget Surpluses	p. 137
High Unemployment Is a Killer	p. 143
With God, You're Golden	p. 148
Stocks Love Lower Taxes	p. 152
Oil and Stocks Seesaw	p. 158
Swine Flu, SARS, Ebola, and Other Viral Disasters Make Markets Sick	p. 163
Consumers are King	p. 167
Presidential Term Cycles Are Stock Market Voodoo	p. 172
My Political Party Is Best for Stocks	p. 178
Stock Returns Are Too High and Must Fall	p. 182
It's a Great Big World!	p. 187
Foreign Stocks Just Feel So...Foreign	p. 189
Who Needs Foreign?	p. 192
Big Debt Is National Death	p. 195
America Can't Handle Its Debt	p. 199
Indebted to China	p. 202
Trade Deficits Make Deficient Markets	p. 206
GDP Makes Stocks Grow	p. 211
Terrorism Terrorizes Stocks	p. 215
Notes	p. 219
About the Authors	p. 228
Index	p. 229
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