The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails

Sane Money, Not Mad Money

Appointing an investor laureate appeals to basic human psychology that animates investing. Anyone who is very rich, or has made other people very rich, is universally admired and studied. Just look at the adulation that surrounds Warren Buffett, and the excitement to attend annual meetings of his Berkshire Hathaway company.

Appointing an accomplished investor to the national role of educating, if not safeguarding, Main Street could be a very effective mechanism to reach people. We know people buy stocks simply because they hear self-proclaimed gurus on TV or at investment seminars, say they should, so it makes good sense harness that very power to teach investors how to think about investing, and how to think of risk before reward. The investor laureate’s pronouncements would attract media coverage and over time this could have a significant impact on the public dialogue about the markets, and how people think about investing. The dialogue need not be dry, clinical, and overly complex. A simple chart—similar to the U.S. Department of Agriculture’s iconic food pyramid—can help investors focus on healthy market conditions and risk-based investing. Howard Marks, who would be a leading candidate for investor laureate, has already developed a good chart that he calls the “Poor Man’s Guide to Market Assessment.”3 See Table 9.1.

Table 9.1 Poor Man’s Guide to Market Assessment

Source: Howard Marks, The Most Important Thing, Columbia Business School Publishing, ...