Smart Investing Ideas from the World’s Most Irritating People

I did not attend the World Economic Forum in Davos again this year.

I have enough friends in the press and corporate world that I could probably wrangle either an invitation or press credentials, but I have pretty much no interest in attending.

The event is held in January in Davos, Switzerland. And it’s cold. Very cold. The snow and ice is more than I can tolerate. Ice belongs in cocktails glasses, not on the streets and sidewalks. I moved to Florida for several reasons, but escaping snow and ice was near the top of the list.

To make it worse, the town is full of government officials and what I call the institutional-rich hedge fund folks, Wall Streeters, and self-proclaimed experts in just about any topic imaginable. 

I have a very low tolerance for most of these folks and cannot imagine spending thousands of dollars to hang out with them for an extended period. Frankly, I vastly prefer the companionship in the bleachers of Wrigley Field, the Nick and Franks pub near Camden Yards, or the stands in turn 4 of the Daytona 500 (where I will be in just a few weeks).

However, those with the gold tend to make lots of the rules and move lots of money. And the amount of money represented at Davos each year is enough to shift the financial markets.

For that reason, it’s useful – and profitable – to know what they talked about over hot chocolate and Irish coffee in the mountains of Switzerland this year.

So let’s take a look at one of this year’s biggest topics, and how it can make us lots of money

Investing Risk Is Okay. These Stupid Investing Risks Are Not

Life is all about risk.

From the second you rise in the morning to the moment you crawl safely back into bed at night, you are taking risks of some sort.

All day we make decisions about what risks we are willing to accept and which we are not.

Do we cross at the light in the crosswalk, or do we dash across a busy avenue avoiding traffic? Should we tell our boss what we really think, or just nod and move along?

What risks will we take and which will we avoid? Life is just a never-ending string of choices about risk and reward.

The big choices all have risk and reward trade-offs, don’t they?

If we follow the designated path of getting a job and working in a “normal” career, we should avoid the risk of ruin. But if we follow our dreams and become a writer, a singer, a ballplayer, the rewards could be tremendous.

However, dream chasing potentially has a very high cost and takes an enormous amount of dedication and hard work with the odds against you.

As Damon Runyan once noted “Furthermore, in Dream Street are always many hand-bookies and horseplayers, who sit on the church steps on the cool side of Dream Street in the summer and dream about big killings on the races, and there are also nearly always many fight managers, and sometimes fighters, hanging out in front of the restaurants, picking their teeth and dreaming about winning championships of the world, although up to this time no champion of the world has yet come out of Dream Street.”

If you dash across I-Drive against the lights here in Orlando, the local traffic stats tell me you have a pretty good chance of getting run over by a tourist looking at their traffic app for directions or arguing with their spouse about where to go to dinner.

Crossing at a crosswalk reduces those odds of a high splat factor. Meeting a woman at a church and finding out you have common interests and aspirations, then dating for a year and getting married, has much higher odds of success than choosing your spouse at the bar behind the crap tables at Caesars in Vegas at  3 am and getting married at the Elvis Love Chapel as the sun comes up.

Yet without risk, nothing great is ever achieved.

If Bill Gates doesn’t decide to bet on himself and drop out of Harvard, there is no Microsoft (MSFT). If Warren Buffett goes back to Omaha and becomes a stockbroker, there is no Berkshire Hathaway (BRK). If the pilgrims and pioneers do not take incredible risks to find a better world, there is no United States. Great dreams can require great risks.

But there are smart risks in life, like betting on yourself when you know you have an edge. Having a child in an uncertain world is also a risk, but trust me when I tell you that it can pay off handsomely. And then there are dumb risks in life as well, like the sunrise wedding in Vegas with the wedding rings fashioned for a tequila label.

So all of life involves decisions about risk versus reward.

And investing is yet another great example of that.

Here are the dumbest investment risks, and the smartest

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