What do you believe that’s actually false?

Saturday, May 13, 2006 | 10:07 AM

I am not a big fan of the ubiquitous Ken Fisher ads everywhere you look on line; They are way annoying. There can be little doubt that Fisher has frequently been too bullish (he's looking for a 10-40% rally based on bond yields not rising this year)

However, it would be a mistake to dismiss Fisher out of hand. I find that he is often very insightful, particularly when it comes to having a good overview on various investment concepts. And his take  on one of my favorite subjects, investor's self awareness and blind spots, is particularly astute.   

A recent speech by Fisher was titled "The Only Three Questions That Count."

What are these questions?

1. What do you believe that’s actually false?
2. What do you know that others don’t?
3. What the heck is my brain doing to blindside me now?

Before you read the answers, think about that for a while. Thy are very interesting questions;

Here are his answers:

1. What do you believe that’s actually false?

Answer: Beware popular opinion. It is never “investable,” even when it is correct. That’s because the market has already discounted popular opinion.

2. What do you know that others don’t?

Answer: Be honest. Only invest when you have such an advantage.

3. What the heck is my brain doing to blindside me now?

Answer: There is always a temptation to let popular opinion dissuade you from acting on your own proprietary knowledge. It's hard to run alone.

Fascinating stuff. Thanks, Rich and Ken.

Ken Fisher on Stocks in 2006
Rich Karlgaard   
May 02, 2006 

Saturday, May 13, 2006 | 10:07 AM | Permalink | Comments (17) | TrackBack (0)
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Nice rules, but I don't know if any investors, including pros, are truly capable of answering them. It would be equivalent to finding the person who leads a sinless life.

And it's not actually far away from the thinking of our current secretary of defense, who famously said:

"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know."

Posted by: royce | May 13, 2006 11:32:09 AM

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