Welcome Chad Carlson to Crash Market Stocks

Chad CarlsonOne of my goals of this website is to try and provide more and more knowledge and insights to you as readers. To help accomplish this goal, I have invited a good friend of mine to be an author on the blog as well. Chad Carlson has some great experience working at Morgan Stanley and will be a great contributor to Crash Market Stocks. His insider experience can bring a new light to the site and discuss other elements of trading that I have not experienced. I will continue to give my daily posts, so sometimes there will be two posts a day, so keep your eyes out. You can access all of Chad's posts at anytime by clicking either the link on top or on the side bar that says Chad's Corner. So on that note, I give you Chad Carlson:

Reinvent The Wheel


I sat there trying to absorb all the wisdom from a 25 year vet of the business. His plaques, certificates, and diplomas screaming at me while confidence oozed from every word. Hours later the epic event ended with a classic Al Sharpton moment, “Son, we don’t need to reinvent the wheel, what has worked in the past will continue to work today”. We don’t need to reinvent the wheel? Is the model T the best car available? Is bleeding still a medicinal practice?

We are in a new era of investing. What worked for the past thirty years will not suffice today. We can not be so naive to think that an 80/20 split is adequate to survive this day and age. Pension plans are a thing of the past, social security funds will be dry in the next the twenty years, the average person changes jobs seven times by the age of 28, and 401 k plans are limited in their capabilities. The responsibility falls on you. Treat your portfolio like a business.

You can diversify all you want amongst mutual funds, bonds or even stocks but you are still invested in the market. You are still going to throw up from the roller coaster ride that is our economy. Sure that mutual fund has a great track record. Sure that stock has the “chance” of doubling overnight. I have a chance of taking Kobe one-on-one too.

As a former financial advisor I was required to state to my clients that nasty little clause, “Past performance is not an indicator of future results”. In other words, this hypothetical I just made you is misleading and your little world is going to burst when that 12% return never comes. But we should not reinvent the wheel right. What has worked in the past will continue to work today. Just ask Ford.

The new wave of investing is the old way of capitalism. Flexibility. Adaptive. You must be paid for the risk you are willing to take. Yes the market is going to rebound, we all know that. The question is when and what to do until then. Do you sit on the sidelines with cash? Do you take chances on stocks with their all time lows? Do you simply let your portfolio ride the way it is? There are answers. The powerful will simply survive this recession, but the intelligent will succeed.

There is something in the finance world called smart money. University endowments, foundations and state funds invest differently than 99% of the world. They also outperform 99% of the world. The average investor can invest like the Yale endowment. There are more than just mutual funds and stocks. It’s about attacking all markets, minimizing risk and generating alpha. It has been done with the ultra wealthy and now it is time for the average Joe. It is time to reinvent the wheel. Check Out The Free Latest S&P Technical Points Video

3 comments:

  1. 5U Says:

    No offense, but Meredeth Whitney is hotter

  2. Anonymous Says:

    I know this post is over a year old, but just found your blog, which I like very much.

    I just did some quick research and apparently the average investor CANNOT invest like the Yale endowment because educational institutions have access to certain hedge funds that the public does not.

    But yes, you can come very close and in a nutshell you can invest in ETF's that cover most of the sectors that they also invest it.

    Great articles. Looking forward to learning more.

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