When Good Ideas In Investing Become Dominant They Become Destabilizing

Johnny HopkinsPodcastsLeave a Comment

The Acquirer’s Multiple® - FREE Stock Screener

unlimited

During his recent interview with Tobias, Chris Cole of Artemis provided a great anology of what happens when great ideas in investing become dominant, saying:

I’m a single guy. I go out and I see a cute girl. I ask for her phone number. That’s taking a risk. Maybe she gives me her number and we go on a nice dinner date together. Maybe she says, no thank you, and that’s okay.

Now imagine if I systematically took that risk and kept asking her for her number again and again and again. That’s called ‘stalking’ and it’s not a good thing. That’s bad right. So systematically applying risk in a non-thoughtful way. You take a good idea and you turn something into something very very dangerous.

Unfortunately I think in this world of financial engineering we’ve become so enthralled with harvesting risk premium that we lose common sense. Good ideas, when they become dominant become destabilizing. Finance is littered with it. I mean everything from portfolio insurance to mortgage-backed securities. The list goes on and on and on.

You can find out more about Tobias’ podcast here – The Acquirers Podcast. You can also listen to the podcast on your favorite podcast platforms here:

Apple Podcasts Logo Apple Podcasts

Breaker Logo Breaker

PodBean Logo PodBean

Overcast Logo Overcast

 Youtube

Pocket Casts Logo Pocket Casts

RadioPublic Logo RadioPublic

Anchor Logo Anchor

Spotify Logo Spotify

Stitcher Logo Stitcher

Google Podcasts Logo Google Podcasts

For more articles like this, check out our recent articles here.

FREE Stock Screener

Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple:

unlimited

Join 10,176 other investors in search of undervalued stocks, value investing news, and investing strategies from the greats:

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.