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Jackass Investing

Topic: Finance

 From HandWiki - Reading time: 3 min
Jackass Investing:
Don't do it. Profit from it.
Book Cover Image - Jackass Investing.png
AuthorMichael Dever
CountryUnited States
LanguageEnglish
SubjectInvesting
PublisherIgnite LLC
Publication date
2011
Pages284
ISBNISBN:978-0-9835040-0-9
OCLC760086114

Jackass Investing: Don't do it. Profit from it. is a book written by Michael Dever published by Ignite LLC in 2011. Dever is the founder and CEO of Brandywine Asset Management, Inc., an investment management firm founded in 1982.[1]

The book has also been released under the title Exploiting the Myths: Profiting from Wall Street's misguided beliefs.[2]

Overview

"Jackass Investing" is an investment book that challenges conventional investment wisdom[1] and presents an entirely new system of thought.[3] The book describes 20 common investment myths[2] and explains why each is a myth and not a fact.[3]

The book is based on the trading philosophy of author Michael Dever,[4] which is based on broad strategy and market diversification.[5][6] According to Dever, the definition of "Jackass Investing" is taking unnecessary risk.[7]

The book was published in 2011, but Dever initially developed the idea for the book in 1999.[1] He decided to write "Jackass Investing" to systematically refute major investment myths. He believes that most investment professionals preach similar "myths" that prohibit investors from creating truly diversified portfolios.

Dever introduces the concept of "return drivers" and explains how to use them to create trading strategies, which are the components necessary to create a truly diversified portfolio.[3] A return driver is the core underlying reason that drives the price of a market.[2]

The Myths

The "myths" include the following:

  • Myth #1: Stocks Provide an Intrinsic Return
  • Myth #2: Buy and Hold Works Well for Long Term Investors
  • Myth #3: You Can't Time the Market
  • Myth #4: "Passive" Investing Beats "Active" Investing
  • Myth #5: Stay Invested So You Don't Miss the Best Days
  • Myth #6: Buy Low, Sell High
  • Myth #7: It's Bad to Chase Performance
  • Myth #8: Trading is Gambling - Investing is Safer
  • Myth #9: Risk Can Be Measured Statistically
  • Myth #10: Short Selling is Destabilizing and Risky
  • Myth #11: Commodity Trading is Risky
  • Myth #12: Futures Trading is Risky
  • Myth #13: It's Best to Follow Expert Advice
  • Myth #14: Government Regulations Protect Investors
  • Myth #15: The Largest Investors Hold All the Cards
  • Myth #16: Allocate a Small Amount to Foreign Stocks
  • Myth #17: Lower Risk by Diversifying Across Asset Classes
  • Myth #18: Diversification Failed in the '08 Financial Crisis
  • Myth #19: Too Much Diversification Lowers Returns
  • Myth #20: There is No Free Lunch

References

  1. ↑ 1.0 1.1 1.2 "Your Investments: Top fund manager shares some tips". The Jerusalem Post. November 17, 2011. http://www.jpost.com/Business/Commentary/Article.aspx?id=246018. 
  2. ↑ 2.0 2.1 2.2 "Author of "Jackass Investing" employs the multi-strategy systematic model he preaches". Opalesque's Emerging Manager Monitor. Opalesque. May 2012. http://www.opalesque.com/new-managers/5/editorialnewmanagers-may-2012-opalesque-s-emerging.html. 
  3. ↑ 3.0 3.1 3.2 "Jackass Investing: Don't do it. Profit from it.". Futures Magazine. July 11, 2011. http://www.futuresmag.com/2011/07/11/jackass-investing-donrsquot-do-it-profit-from-it. 
  4. ↑ Jay, Marley. "Contrarian investor Mike Dever shared with us 2 vital lessons he learned from his highly profitable association with legendary trader Paul Tudor Jones" (in en-US). https://www.businessinsider.com/investing-how-to-stock-market-advice-lessons-paul-tudor-jones-2023-5. 
  5. ↑ "From rural Pennsylvania, Brandywine takes on the world". Automated Trader. Fourth Quarter 2012. http://www.automatedtrader.net/articles/first-person/137298/from-rural-pennsylvania--brandywine-takes-on-the-world. 
  6. ↑ "Getting Along with Your MOM ('Manager of Managers')". Financial Trader 4 (5). 
  7. ↑ "Myth: Largest Investors Hold All the Cards". ai-CIO.com. Asset International. January 16, 2013. http://ai-cio.com/channel/MMEDIA/Myth__Largest_Investors_Hold_All_the_Cards,_Says_Author.aspx. 

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