Jackass Investing

Overview

"Jackass Investing" is an investment book that challenges conventional investment wisdom and "presents an entirely new system of thought." The book describes 20 common widely held beliefs about investing and explains why each is a myth and not a fact.

The book is based on the trading philosophy of author Michael Dever, which is based on broad strategy and market diversification. According to Dever, the definition of "Jackass Investing" is taking unnecessary risk.

The book was published in 2011, but Dever initially developed the idea for the book in 1999. He decided to write "Jackass Investing" to systematically refute major investment myths. He believes that most investment professionals preach similar "myths" that prohibit investors from creating truly diversified portfolios.

Dever introduces the concept of "return drivers" and explains how to use them to create trading strategies, which are the components necessary to create a truly diversified portfolio. A return driver is the core underlying reason that drives the price of a market.

The Myths

The "myths" include the following:

• Myth #1: Stocks Provide an Intrinsic Return
• Myth #2: Buy and Hold Works Well for Long Term Investors
• Myth #3: You Can't Time the Market
• Myth #4: "Passive" Investing Beats "Active" Investing
• Myth #5: Stay Invested So You Don't Miss the Best Days
• Myth #6: Buy Low, Sell High
• Myth #7: It's Bad to Chase Performance
• Myth #8: Trading is Gambling - Investing is Safer
• Myth #9: Risk Can Be Measured Statistically
• Myth #10: Short Selling is Destabilizing and Risky
• Myth #11: Commodity Trading is Risky
• Myth #12: Futures Trading is Risky
• Myth #13: It's Best to Follow Expert Advice
• Myth #14: Government Regulations Protect Investors
• Myth #15: The Largest Investors Hold All the Cards
• Myth #16: Allocate a Small Amount to Foreign Stocks
• Myth #17: Lower Risk by Diversifying Across Asset Classes
• Myth #18: Diversification Failed in the '08 Financial Crisis
• Myth #19: Too Much Diversification Lowers Returns
• Myth #20: There is No Free Lunch

References

References

1. Jay, Marley. "Contrarian investor Mike Dever shared with us 2 vital lessons he learned from his highly profitable association with legendary trader Paul Tudor Jones".
2. (January 16, 2013). "Myth: Largest Investors Hold All the Cards". Asset International.
3. (Fourth Quarter 2012). "From rural Pennsylvania, Brandywine takes on the world". Automated Trader.
4. (November 17, 2011). "Your Investments: Top fund manager shares some tips". The Jerusalem Post.
5. (July 11, 2011). "Jackass Investing: Don't do it. Profit from it.". Futures Magazine.
6. (May 2012). "Author of "Jackass Investing" employs the multi-strategy systematic model he preaches". Opalesque.
7. "Getting Along with Your MOM ('Manager of Managers')". Financial Trader.