Maybe you can learn something about personal finance from celebrities.
In preparation for his upcoming film Wall Street 2: Money Never Sleeps, Shia LaBeouf is claiming that he put $20,000 into a Schwab online trading account and traded his way to $489,000.
(I?m not going to say that he didn?t do it, but if he did, he?s wasting his time working in Hollywood.)
But just recently, tech sector finance blog Silicon Alley Insider ran a post called Bono Named ?The Worst Investor In America.”
So what can we learn from this? Well, there’s an upside to everything — you just need to look at it from the right angle.
Signal vs. Noise
When you’re making investing decisions, it?s important to filter the signal from the noise.
But advice from celebrities, as a matter of course, isn’t always noise. In fact, some of it can be a valuable bellwether when making investment decisions.
One of the axioms I follow is that everything a celebrity says about finance is wrong.
Think of the statements they make as valuable contrarian indicators. Listen to what the say, and then do the opposite.
A perfect example of this is people who trade against Jim Cramer?s Mad Money picks. Cramer is famous for being so disastrously wrong on so many occasions that going counter to his picks seems like a tidy proposition.
It’s a Great Plan, Until it Isn’t
Bear in mind, however, that nothing in investing or trading is perfect.
It?s often said that ?Investment theses work great?until they don?t.? My goal here isn?t to offer financial advice per se, but to share my approach to how I interpret market signals, depending on the source they?re coming from.
There’s always an upside, even when on the surface it looks like useless noise.
About the author: Lee Distad consults with CE integration firms on design, installation and project management processes and Best Practices, and offers provides professional copy writing services for websites, brochures, and marketing initiatives. Visit him at www.leedistad.com.
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