Mighty Bargain Hunter

Nobody likes a winner

February 22nd, 2008 | by mbhunter |

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I’m coming to realize that it’s probably better to keep my mouth shut about my investments.  I’ve stopped talking so much about what I’ve invested in, except with a few like-minded friends and relatives (and my wife).

Consider this example:  Suppose I think that there’s a big move coming up in, say, copper futures.  I don’t really have much of an opinion on the copper market, but let’s pretend that I have some spider sense regarding copper production numbers, and I think that production is going to plummet during the next two months.  I buy a whole lot of copper futures, waiting for the money to flow in as people scramble and clamor for what is available.

Now, I start telling my coworkers, many of whom don’t really care about the base metals markets, but who get irritated enough with hearing about how much money I’m going to make that they’ll check out how copper is doing in a couple of months.  If I turn out to be right, they’ll hate me for making so much money, especially if their
investments aren’t doing so well.  If I guess wrong, then I look like
an idiot (well, more of an idiot than usual).

Tipping your investment hand isn’t quite so bad if everyone’s making money together or losing money together.  We either pat each other on the back, or console each other.  But for every buyer, there’s a seller, and for every seller who sold at the top, there’s some buyer who bought at the top.  If people know that you were selling at the top while they were still buying, you’re not going to be very popular.

But if you don’t tell them, they won’t know, and you will be just as far ahead.