The Only Three Questions That Still Count: Investing By Knowing What Others Don't, 2nd Edition

When You Are Wrong—Really, Really, Really Wrong

Chapter 5 expanded on how Question One helps uncover false myths “everyone” knows, even though no one bothered to fact-check. More exciting, you can find myths so broadly, irreversibly and passionately held, the exact reverse ends up being true. Where mythology is so really, really, really, really wrong, it’s actually backward—like our example of federal budget deficits leading to great stock market returns instead of disaster. You link a Question One to a Question Two and learn the exact reverse of common mythology is a bet-able truth. We’ll demonstrate a few of those in this chapter to show you how you can do it on your own. Just start with anything people are intensely righteous about. You may be labeled a heretic by acquaintances, but so what? (It’s not your business what people think about you, remember?) One reason so many investors fail is they fear asking questions that make them seem like crackpots. Don’t fear being seen as a crackpot—fear making bets based on possible fabrications.

When Debt Is Good!

Let’s begin by exploring a topic sure to unite just about everyone, regardless of creed, in an appalled uproar.

Debt.

In Chapter 1, I showed how the universally deplored federal budget deficit historically hasn’t led to poor stock returns—rather to good ones. I showed you the data—the what—but not the how and why. For that, you must understand debt and deficits better—know something others don’t and see how they’re used, abused ...