Another round of advice on sticking to an investment plan might sound like our needle is stuck, but this time we’re coming at it from a slightly different angle. Bloomberg View columnist Barry Ritholtz shares perspective on comments made earlier this month by Convergex chief strategist Nick Colas.
The gist of Colas’ view was that investors should heed the advice of billionaire investors such as George Soros, Jeff Gundlach and Bill Gross, all of whom seem to agree that that stock market isn’t the place to be right now. But according to Ritholtz, the problem with following the lead of these investment icons is that they’re in a separate league than the typical investor. He boils down his view: “Maybe you shouldn’t follow the trading advice of billionaires if you aren’t one.”
While our guru stock screening models are built on the philosophies of some of the most successful billionaire investors, we apply many of the fundamental, mathematical measures they use (not media soundbites) to identify attractive stocks. Ritholtz urges investors to “consider your own goals and motivations, which are probably very different from those of the billionaires.” For example, he argues, many investors are planning for retirement, buying a home, or paying for a child’s college education. In contrast, Ritholtz says that investment moguls may be more focused on goals such as “cementing their legacy, promoting a particular company, or making an adversary’s life miserable.”
“Following their trade recommendations,” Ritholtz warns, “may not work out well for you.”