That has always been my main investing mantra, even when it seems out of fashion. With the proliferation of smartphones, we have entered a new information age, and it is difficult to find anyone that doesn't know the prices of relevant securities in real time. What is amazing is the preponderance of advice that one can find on financial websites that espouses a sort of willful blindness. Don't worry about your portfolio, Janet Yellen and Jerome Powell got this!
Hogwash. Knowledge is power.
As I mentioned in my column last week, the best way for an individual investor to lower the figurative "house advantage" that Wall Street's "casino" has, is to do basic research. But there is this funnel that wants to push a sort of diluted, Wall Street groupthink right down your gullet, and I was part of that machine for more than a decade on two different continents.
I am old enough that much of my sell-side career was before the Information Age truly blossomed (the Internet existed, but the World Wide Web was only slowly being adopted for investment use) and in the decades since, I have seen a democratization of information that would have made J.P. Morgan choke on his cigar. It's not an insider's game anymore in terms of information. God knows the Fidelitys and BlackRocks (BLK) of the world -- with assets under management measured in the trillions of dollars -- could squash any of us like a bug, but knowledge is power. Size is as much of a disadvantage in portfolio management as it is an advantage. I have seen that dynamic play out many times.
So, if you want to beat the big guys, you should seek out novel sources of information. Here are some ideas:
Subscribe to a financial site that provides independent thinkers and veteran analysts like Chris Versace (an old DLJ colleague of mine) and dedicated market trackers like Carley Garner on the commodities front and Jim "The Rev Shark" DePorre on the equities side. That's Real Money, and, obviously, you already consume the content. Kudos.
Watch the bond market. Always. I use Bloomberg's rates and bonds page. The bond market is telling you that any Fed let-up in quantitative easing will lead to a significant pullback, and those always precede crashes. We are in the 1970s, man. But back then yields were in the high single-digits and even broke into the low double-digits. The cost of money hasn't changed that much. The Fed has created a bubble. The bond market will figure this out well before the stock market does. So, use the St. Louis Fed's excellent FRED database to gain some historical perspective.
Watch commodities. That's where the stagflation in the current global economy is most evident. I check oil prices every morning and many times throughout the day.
Watch China. My equity research background is in automotives, so I go to autonews.gasgoo.com every day, as well. The Chinese economy is going through some extreme controtions now with power rationing, semiconductor rationing, and the transportation transition to electrified powertrains. I am biased, but I believe automotive is the best bellwether sector for the global economy.
I could do without all the honky-tonk and constant left-wing bias that emanates from NBC News, and I find that CNBC's corporate affiliation with its parent is just too much to take. So, when I want quotes I go to investing.com, although I do still check a few names on cnbc.com. The information is the same. Just make sure that you are getting it as propaganda-free as possible. It helps to have a clear mind when doing trades.