The ‘show about nothing’ recently came to Netflix and we’ve been catching up on a few. It’s amazing to me how some of the episodes hold up quite well, particularly considering it’s been 30 years since the show premiered. On the other hand, there’s a number of situations where the gang would have avoided their funny hijinks altogether if they only had a cell phone!
Just the other night we watched the episode where Jerry gets a stock tip, and of course, it goes hilariously wrong. A few different thoughts ran through my mind as we were watching, so I thought I’d share my takeaways with you.
First, Jerry kept checking the newspaper for the stock price. A newspaper! Remember, that thing you used to have delivered to your door? It’s been at least a decade since I’ve had a regular paper delivered to me. Why should I when I can get access to all news source straight from my phone? Back then, people had limited access to financial information. There was no internet to check stock prices. CNBC had just started, but I doubt it had widespread impact then. Contrast that to today where you can get bombarded with information, if you let yourself. He was obsessively checking any newspaper he could find for the stock price- I can’t imagine how bad he would have worked himself up if he could check the price all day, every day!
The desire to chase that ‘hot tip’ doesn’t seem to have changed, however. I think that must be hardwired into our human nature somehow. I still get questions from time to time on what the next ‘hot’ item might be. Many years ago, there were the old fashioned ‘stock brokers’ pushing the latest stock, which was usually whatever their firm told them to push. Thankfully, that’s not at all the way I do business. I’m glad to be focused on helping people make smart decisions with their money to help them achieve their goals in life. None of that deals with picking that one, perfect next investment that will double tomorrow.
At one point in the episode Jerry said he just wasn’t cut out for the stock market, which he came to realize after he lost most of his investment. I’ve explained many times to my clients that no one complains when they’re taking on more risk than they can handle while the markets going up – who complains about making too much money!? But it comes back to haunt you when the market falls and it’s too steep of a decline to handle. Too many folks sold out after the dot.com crash or the financial crisis of ’08 and never got back in the game. Selling out after the fall is often the worst thing to do!
The idea of market risk isn’t going away. I take a little different approach when helping clients through the question of how much risk to take. I do look at what kind of risk they need to take to achieve their objectives, but I also like to look at it from the standpoint of how much risk they’re comfortable taking. If they can hit their goals going the speed they want to drive, all the better. If not, then that’s a sign we have to dig in deeper.
So don’t be like Jerry. Don’t chase the next fad just because your buddy tells you to. Take a more thoughtful approach, and let me know if I can be of service in anyway.
