Follow the Money – My Approach To Investing
The main reason that I follow the markets so closely is because I fundamentally believe that above all else, one thing in particular dictates nearly every other aspect of our society: money
Now, I am well aware that "money" is often portrayed as evil and pursuing money is not the path to happiness (as my mom likes to remind me). While my mom is right, the thing that needs to be kept in mind is that following the money gives one an insightful glimpse into the inner workings of our society.
By following the money supply we can foster a deeper understanding of political trends, social trends, economic trends, geopolitical interests, etc. You know, the things that truly matter.
This, folks, is as close to a super power as us mere mortals can attain. Of that, I am convinced. I will let your mind ponder on this without detailing in a list, bullet points, or funny gifs on how and why this is useful.
Now, the next piece of the puzzle is answering the following questions:
There’s so much information out there now… (1) Where do I begin to learn and research investing on my own? (2) How do I know whether or not I am reading reliable information? (3) How can I educate myself on investing as efficiently as possible?
First and foremost, READ. Don't just listen to me, take it from some other names you'll surely recognize.
These gentleman may read more than you and I can manage, and that is okay. I would expect no less from a full time investor.
But, the point remains that reading is our strongest tool to follow the flow of money, and as a result, we are really following more important structural trends that dictate public policy, international relations, global finance, social well-being, etc. Again, the things that ought to truly matter to anyone who likes to know what the hell is going on.
In terms of trying to make sure we are reading reliable information, this has to come from experience. My belief is that everyone ought to define their own standard of what "reliable" information means.
We will provide resources here, and digest the information as it comes, but it is worth mentioning that the answer is always to read. While no single source may ever be 100% accurate, the more you read the more you decipher the complete mosaic. Once the materials for the mosaic have been gathered, we can then reflect on the bigger picture and consult our intuition.
For example, I read a number of newsletters, websites, blogs, etc. and listen to a wide variety of podcasts to gather information. I even read the mainstream sources so that I can understand where public sentiment lies (or at least, where public sentiment is being led to lie).
Back to the investing angle. Through our efforts to understand the flow of money and all of the macro/micro-intricacies related, we can then identify opportunities of an asymmetric nature. Substantial more upside than downside with limited capital at risk.
By identifying opportunities prior to substantial money inflows take place, we set ourselves up for the highest likelihood of success.
I'd like to point out that anyone can invest successfully.
We are all well aware of the fact that the term "expert" does not carry the same weight that it used to, unfortunately, seeing as nearly everyone in the media is now some sort of expert. Don't get me wrong, experts do exist. Odds are you will not see them on TV, though.
So, relying on any sort of financial planner (or "expert") to pursue our personal financial freedom on our behalf does not sit well with us. We would rather pursue our freedom on our own.
After all, who else other than ourselves, has more motivation to pursue our self-freedom and see it through?
Do not be intimidated, folks! The learning process is friendlier than you might expect.
Not feeling so confident? Take it away funny E-Trade babies....