Sunday Morning Coffee

A reader asks;

You seem to cite CNBC and Barrons frequently and occasionally the WSJ. You do mention other investment blogs like Seeking Alpha etc. It seems as if you only refer to the mass media in your commentaries.

I can't think of very many instances of you referencing books/articles like the Graham's Intelligent Investor, academic papers from Fama and French, Security Analysis, articles from the Journal of Financial Planning, or authors of other works relating to finance/investing.

I'm just curious why. Do you read much and if so could you share your reading list? Do you feel academic works are irrelevant?

In terms of the things I read I have mentioned this before and I don't think it is a particularly unique list of things. On a daily basis the list includes Seeking Alpha, the FT, the WSJ, Bloomberg, IndexUniverse, Credit Writedowns, Barry Ritholtz, a little bit of Mish, various links I stumble across from various places which often includes Ambrose Evans-Pritchard, sometimes the Globe and Mail, anything from or about Jim Rogers, Marc Faber, Jeremy Grantham and others like that and there are others that are not coming to me at the moment. Obviously I read Barron's and John Mauldin on the weekend.

The more interesting part of the comment is about academic works. I've been in the business in one way or another since 1984, have always had a keen interest relative to people I've worked with and always spent a lot of time trying to learn relative to other people I've worked with.

I have read some of the "classics" but not all of them. Intuitively no approach or belief can always be correct for all times. As an example I do believe the market is efficient except for when it isn't. It is easy to believe that the market generally prices in all known information but to the extent the market represents the sentiment of the masses, the masses (the herd) will not always be correct. I've also mentioned in the past that I've observed that fast declines caused by panics often retrace much of the initial decline immediately (no claim of originality on that one); the current events in Egypt as an example.

The idea of something being correct except when it isn't makes intuitive sense to me so I go with it.

For the way I look at things and prefer to do things, unwavering devotion to the classics doesn't fit. It might be correct to think of the classics as building blocks but with more weighting to actual experiences in terms of going through cycles, panics, booms and the like. Real world events seem to not fit squarely with certain aspects of academia or theory. Total reliance on fully invested diversification in 2008 did not work out very well. Some point out that bonds did well in 2008 but I would say more like US treasuries did well in 2008, a reasonably diversified bond portfolio didn't do as well.

I also spend time reading people that I think of as "great thinkers." It is not so important to agree with everything they say in order to learn. I've learned much from Nassim Taleb but disagree with plenty of things he says.

Clearly what is right for one person does not have to be right for another. I believe this supports the idea of taking little bits of process from many places to build your own process which is exactly what I've done.

The picture is where I will not be staying as I fly to Florida today for the Inside ETFs Conference put on by IndexUniverse.