Sometimes, being too smart can work to your detriment. For instance:
- If I knew how quickly the COVID-19 pandemic could shut down the economy and how many jobs would be lost, I would have cut my losses and taken all my money out of the market after the initial drop in late March.
- If I knew 20 years ago how the future of photography would be digital, I would have put all my money in the number 1 camera company, Kodak.
- If I realized that global dependence on oil would increase its demand and price, then all oil companies would be my commodity of choice, especially in Canada.
- If I realized telecommunications was going to change our ability to communicate, I would have had all my money in Nortel Networks.
- If I realized that after the turn of this century, that our communications and email would be through our cell phones, I would have put all my money into Research in Motion (turned Blackberry), the innovator of this technology.
- If I knew about the tech correction that came after the year 2000, I would have never touched a tech stock in my life.
- If I knew about the financial crisis that would affect all financial institutions, I would have avoided banks like the plague.
Thank God, I’m not that smart! I’ve invested in a globally diversified, balanced portfolio over the last 30 years and done very well. My portfolio has had every stock in the world (good ones and bad). For every Nortel Networks, there was an Amazon or Apple to make up for it. Point being, regardless of how smart you are, it is impossible to outsmart the collective minds around the world. The market’s reaction to the COVID-19 pandemic is just another reminder of why staying humble and disciplined is the smarter approach.
