In 2014 I Learned That…

I can’t prove it scientifically, but I’m pretty sure the years are flying by faster now than ever before. Is everyone just so busy that the passage of time is occurring while we stare at our phones? Or are the events that shape each year simply playing out faster, from start to finish, because of the increased pace of modern life? 

More importantly, will 2015 move even faster? 

I don’t know the answers, but you’ve already heard enough from me this year anyway (I’ve heard enough from me too!). So for today’s look back on the lessons of 2014, I got a little help from my friends!

Happy New Year and thanks for reading! See you on the other side. – Josh

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In 2014 I Learned That…

Aron Pinson (Microfundy): rates don’t necessarily rise in a rising rate environment.

Justin Paterno (StockTwits): if the US economy were a football team it would have the personnel of the Patriots with the fans of the Jets.

Justin Frankel (RiverPark Funds): beating your benchmark isn’t the key to happiness or success, but it’s a fine place to start!

Morgan Housel (Motley Fool): unsustainable things can last years, even decades, longer than people think.

Tom Brakke (Research Puzzle): A heavily-analyzed, globally-traded commodity can go down fifty percent in response to relatively modest changes in fundamentals.  Therefore, you might want to take the predictions you hear and the models you rely upon with a grain truckload of salt.

Stephen Weiss (Short Hills Capital): terrorists don’t respect copyright or trademark laws as Isis Pharmaceuticals found out.

David Merkel (Aleph Blog): you can be a good stock picker, but if you had a large allocation to foreign markets, you didn’t make much money.

Rob Passarella (Bloomberg): The market is the final word, no matter what everyone on Twitter retweets and favorites.

Ben Popper (The Verge): Penny stock whiz kids are a dime a dozen. Just make sure your fact checker is legit.

Ian Rosen (MarketWatch): you can’t throw a rock without hitting five amazing things yet to be built, that passionate people can care deeply about anything- including fonts, and once you learn about great ice cubes you can’t stop seeing the bad ones..

John Melloy (CNBC.com): Ben Bernanke’s plan has worked. The debate is over. Central bank printing can translate into GDP growth.

Joe Fahmy (Zor Capital): a woman’s “be ready in 5 minutes” and a man’s “be home in 5 minutes” are about the same.

Anonymous Hedge Fund Flack: Event-driven” means you’re short vol and praying deals don’t blow up.

Dan Nathan (Risk Reversal): not everyone on the financial Twitters appreciates a good “that’s what she said” joke

David Gaffen (Thomson Reuters): companies frequently held up as models of innovation and efficiency are neither, and are often living off the productivity they earned decades ago en route to becoming a shell of their former self, while many large investors, devoid of better ideas, are urging some more successful companies to follow in the same direction. I know, it’s optimistic.

Art Hogan (Wunderlich Securities): airlines flew, oil was slippery and utilities could get more expensive.

Tim Connolly (Sconset Capital): because people buy gas for their cars, they are experts on world oil markets.

Eddy Elfenbein (Crossing Wall Street): 15 years of small-cap outperformance is long enough.

Michael Batnick (Irrelevant Investor): if you can get market returns, i.e. ~8% a year, your money will multiply tenfold over a thirty year-period. Over three decades, most investors won’t produce Alpha and the good news is they don’t need to.

Nancy Miller (Financial Journalist): big data and other wonders of the high tech world didn’t make us any smarter — at least when it comes to markets. The 50% drop in oil prices has humbled us all.

Nick Murray (Simple Wealth, Inevitable Wealth): all of economic and financial life, for good and ill, continues to be a black swan event, predictable (and predicted) by precisely no one (viz. an effective halving of the price of oil). As William Goldman said about the movie business, “Nobody knows nothing.” Or to paraphrase Shakespeare, “First thing we do, let’s kill all the prognosticators.”

Barry Ritholtz (The Big Picture): despite the fact that more good investing information is available to the public than ever before, a large and unhealthy percentage of investors are hellbent on following get rich quick schemes, gurus and lottery ticket salesman. Aspirational stupidity is alive and well in the world of finance/investing.

Patrick O’Shaughnessy (Millennial Invest): the best investments are painful to make. Value investing works, but energy stocks in 2014 illustrated how painful cheap stocks can be in the short run. It’s hard to be different than the crowd, but as Jim Grant said, “Successful investing is about having people agree with you…later.”

Michael Kitces (Nerd’s Eye View): Venture capitalist firms see so much potential for technology to disrupt the financial services industry that they’ll invest in “robo-advisors” and other companies at 50X, 100X, or even almost 200X revenues just to have an opportunity to be a part of it… regardless of whether any of them are actually succeeding in any way whatsoever.

Eric Peters (Peters Capital Group): the greatest gift you can give a thoughtful person is to make them think.

Jon Boorman (Broadsword Capital): people will go to extraordinary lengths to rationalize market action and make it fit their narrative. This year wasn’t 1929, or 1987, or even 2007. It was in fact, 2014.

Katie Benner (Bloomberg View): Stuyvesant high school kids are total sociopaths. And they’re probably working with North Korea to take down Angelina Jolie’s Cleopatra.

Phil Pearlman (Yahoo Finance): News media is 70% shtick, 20% schmaltz & 10% non-dairy whipped topping.

Jonathan Wald (CNN): just think, while you’ve been getting down and out about the liars and the dirty dirty cheats of the world, you could’ve been getting down to this sick beat.

Jay Woods (floor trader, NYSE): to buy EVERY dip.

Peter Boockvar (The Lindsey Group): crystal balls don’t exist and making year end stock market calls is a worthless endeavor.

Ari Wald (Oppenheimer & Co): whether bull market or bear market, fear mongering sells.

Andrew Thrasher (AThrasher): life is much better lived by enjoying experiences and making memories with friends and family rather than the pursuit of material things. As far as investing is concerned, build a process that you have tested, you can trust and suits your risk tolerance and then follow it. Most of the time it’s that simple, there’s no need to over-complicate things.

Howard Lindzon (UberX driver, San Diego): my prostate is in charge of me. And shit….I sold early. 

George Acs (The Acs Man): the true meaning of “risk off” is when really smart people confirmed how smart they were by being non-committal on whether plunging oil prices would be good for the economy. That is until GDP data was released and only then committed to the obvious. Risk on, bitch.

Mary Childs (Bloomberg News): manage your key person(s) risk.

Nick (Barbarian Capital): markets can move monthly to inflict the most pain. And the American consumer hasn’t really changed, it was just a long hibernation.

Bonnie Baha (DoubleLine Capital): the trend is your friend, but not at both ends.

Andy Swan (LikeFolio): individual consumers are MUCH better trend-spotters than analysts and experts.

Derek Hernquist (Motif Investing): vivid examples of success/failure remain the driver of most activity, no matter how small the sample. As true in markets as it is on 4th and short, storm planning, or Election Day.

George Pearkes (Bespoke Investment Group): the haters gonna hate hate hate the Fed, the bull market, and US growth.

Bob Seawright (Above the Market): that Socrates was right – roughly, “the only true wisdom is in knowing you know nothing”.

Blaine Rollins (361 Capital): the markets NEVER rest. Thanksgiving became the single biggest economic news day of the year and on Black Friday investors and traders who moved quickly to reduce Energy weightings saw the Holidays come earlier than usual.

David Blair (Crosshairs Trader): anything can happen…and often does.

Kris Venne (The Certifiable Planner): being a financial advisor is one part investment management to five parts behavior management – and the behavior management part is just as important on the way up as it is on the way down.

April Rudin (The Rudin Group): In 2014, I learned that Bitcoin (or another digital currency) will eventually disrupt our monetary system as we now know it.  I learned how to explain bitcoin like a 5th grader: block chain ledger, miners, wallets, and other new cryptocurrency-speak.

Charles Sizemore (Sizemore Capital Management): I stress out about the wrong things. Most clients really don’t care if you underperform a benchmark for a year or two. As a general rule, they just want to know that a steady hand is on the tiller and that you’re guarding their money like it’s your own.

Cramer’s Shirt: EGO is not an investment strategy.

Cathleen Rittereiser (Miss Nebraska, 2011): the first best time to leave the party is when the Bridge and Tunnel people show up.  The next best time to leave is when you realize you are the Bridge and Tunnel people.

Brian Lund (bclund): you can’t manage toxic people, nor does the reason for their toxicity matter.  Incompetence, egotism, insecurity, substance abuse, or just good ole fashioned insanity create the same “train wrecks.”  Best to cut your losses quickly with these type of people and move on with your life.

Jim Bianco (Bianco Research): foreign events (Crimea, Ebola, Russia, Malaysian Planes, ISIS, Cuba) have a limited role in the investment process.

Adam Nash (Wealthfront): I’m going to go with a classic: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” – Bill Gates

Tim Knight (Slope Of Hope): there’s just one simple step to making a small fortune by using Elliott Way Theory: start with a large fortune.

Mike Murphy (Rosecliff Capital): every day we have a choice to make…and thoughts become things…so you better choose good ones.

Fightin’ Joe Donahue (Upside Trader): the V is your friend and that you buy every dip in a secular bill market with reckless abandon.

Mark Dow (Behavioral Macro): Reagan is still dead. 1980s nostalgia bands are fine, but trying to revive 1980s economic policies in today’s context gets more wrong every year.

Nicole Sherrod (TD Ameritrade): the iCloud is not a secure place to store indiscreet photos.

Myles Udland (Business Insider): If everyone expects an asset price to go lower from one level — say 100 — and that asset’s value rises to 150, everyone will still expect it to go lower. The problem is that asset prices don’t respond to the laws of physics.

Jeff Kilburg (KKM Financial): it’s ALL about the Fed, About the Fed…Don’t Worry!

Sam Ro (Business Insider): if you ask, most stock market bears will tell you they’re not net short.

Larry McDonald (A Colossal Failure of Common Sense): the global economy trumps the U.S. at driving the interest rate bus.

Chess N’ Wine (iBankCoin): the futures ain’t what they used to be.

Sean McLaughlin (StockTwits): no matter how hard I try, I always know less than I think I’m sure I know.

Downtown Josh Brown (The Reformed Broker): everyone is a disciplined, patient investor, entirely focused on the long term. And then an hour goes by.

Ivanhoff (StockTwits): Less is more. One great setup is all you need to achieve substantial returns. Focus on this setup.

Druce Vertes (StreetEye): 2014 was the year of trolls, mob justice, cyberattacks, spying and privacy scandals, viral beheadings. Forget connecting the world in peace and understanding and ice bucket slacktivisim, social media is where World War 3 will break out.

Jason Raznick (Benzinga): empowering the investor with better, crowd sourced information can alter how investing has been done for over the past century. And, Detroit is rising once again, get ready for 2015…

Jeff Miller (A Dash Of Insight): there is no limit to what people will blame on the Fed.

Allison Schrager (Bloomberg Businessweek): few separate the signal from the noise, in economic data and in life.

Aaron Klein (Riskalyze): Seth Rogen and James Franco were actually capable of creating an international incident.

Max Keiser (The Keiser Report): ‘peak oil’ refers to peak demand, not peak supply.

Jon Krinsky (MKM Partners): the trend is your friend. Despite countless reasons for the market to have a serious correction, the primary trend remains intact until it isn’t.

Joe Terranova (Virtus Capital): the most valuable assets in life are those that hold no monetary value. Health, friends and family…

Mr. John Flowers (MSNBC): “poor services in the areas you control”, “holds people hostage for outrageous sums” and “does a fair job in the social media category” could equally describe ISIS or your local cable monopoly: neither of whom appear to be going anywhere, anytime soon, because both control some very important pipes in their respective fiefdoms and also because Washington has no clue what the “Day After” looks like.

Brian Shannon (AlphaTrends): the market still doesn’t care about my opinion and that “news” is nothing more than “noise” Only Price Pays!

Pierce Crosby (StockTwits): chasing a paycheck will never be as important as chasing something of intrinsic value, and finding those with similar ambitions is essential to your real wealth.

Izabella Kaminska (Financial Times): there’s nothing new under the sun, that Animal Fam is doomed to repeat itself and that almost everything that happens in finance has happened before in some capacity.

Eric Jackson (Ironfire Capital): You can’t always get what you want, But if you try sometime you find, You get what you need.

Blair duQuesnay (Thirty North Investments): extreme investor greed can turn to extreme fear in less than 24 hours, as evidenced by behaviors in late September and early October when the market dropped a mere 9% which is not even a correction. Also, you can’t get Ebola by sitting next to someone on the subway.

Tobias Carlisle (Greenback’d): the most dangerous thing in Australia is not the great white shark, the king brown snake, the Sydney funnel-web spider, the box jelly fish, or the cassowary, it’s the “undervalued” iron ore miner. Ugh.

Jay Yarow (Business Insider): every email, IM, every text, every DM, all the things you write and think are private, are not. One day they are going to be public. So think about that every time you write something nasty about another person or rival company.

Jeff Macke (Yahoo Finance): nothing is private. Nothing. By this time next year your Avi will all be a naked selfie or your salary, whichever is more embarrassing.

Roger Nusbaum (AdvisorShares): the consensus can be very wrong; interest rates are going to have to go up in 2014 was a set-it-in-stone given that of course turned out to be wrong. This should teach us to always be skeptical of such one sided consensus calls.

Cassandra (Cassandra Does Tokyo): the things I wrote which I thought were best we’re most often NOT the things that resonated the most with readers.

Zachary Shrier (Shrier Wealth Management): My wife was right about Bitcoin. And everything else.

Jacob Wolinsky (ValueWalk): everyone forgets the lessons of the financial crisis. Even those who survived it cannot recall the emotional feelings of how hard it is not to sell (what you think is cheap and worth holding onto) or buy (what you think is a great bargain) when the entire news and investment industry is bearish.

Lawrence Delevingne (CNBC): It’s an activist investors’ world, and we’re all just living in it.

Todd Harrison (Minyanville): the greatest trick the devil ever pulled was convincing the world that crude losing 50% in six months is a good thing.

Greg Harmon (Dragonfly Capital): people have a fascination with statistics.  As in science, statistics and correlations can tell a story about the market too.  That story can be useful and often has lessons to be learned.  Learn those lessons and prepare for that relationship to continue, but do not rely on it happening.  If all short term correlations persisted indefinitely human life would not exist, much less an uptrend.

Michelle Celarier (New York Post): …not to gloat, but I was right about Herbalife and Bill Ackman.

James Osborne (Bason Asset Management): no matter the market environment, something will happen to make you second-guess your strategy.

Shane Parrish (Farnam Street): avoiding folly is easier than trying to be brilliant.

Tren Griffin (25iq): I think I’ve been in the top 5% of my age cohort all my life in understanding the inability of people to forecast the macro economy and how the short term performance of the macro economy deviates from short term stock market returns, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.

Steve Spencer (SMB Capital): mental flexibility trumps contrarianism every time

Kid Dynamite (a New England gentleman farmer): if anything ever goes wrong, it’s always easiest to just blame Obama.  If things go right, blame Obama anyway.

Ivan The K (eponymous): Fed blamers can shamelessly talk out of both sides of their mouths.

Tadas Viskanta (Abnormal Returns): after nine years of blogging, users don’t like it when you re-design the site.

Doug Kass (Seabreeze Partners Management): The crowd almost always outsmarts the remnants!

Frank Zorilla (Zor Capital): social financial media is the new benchmark. #unicorn

Ryan Detrick (MIA): it turns out that charts from 1929 don’t matter in 2014.  They might be good for page views, but not so much at determining what will happen.

Roben Farzad (Full Disclosure Radio): absolutely nothing is impossible in the euphoric-spaztastic 18 minutes after you drink cold-brewed coffee.

Brian Gilmartin (Trinity Asset Management): day-to-day, anecdotal impressions can matter in investing, like seeing all the Prius and hybrid cabs in Chicago and the alternative-fuel trucks in and around Chicago, and wondering, “how can this not impact crude oil demand at some point ?” Hence, we had zero weighting in Energy the last two years for clients.

Turney Duff (The Buy Side): when Megan Trainor’s song comes on the radio it’s a little easier on the ears to change the lyrics to: I’m all ’bout that fed, ’bout that fed, no easing.

Bruce Kelly (Investment News): I learned from David Kay, ex-CEO of Nick Schorsch’s American Realty Capital Properties Inc. that “one plus one equals three” in certain related party transactions. That is, until it doesn’t.

Roddy Boyd (Southern Investigative Reporting Foundation): everyone–EVERY LAST ONE OF US–says they love, admire and respect deep-dive accountability reporting on complex capital markets issuers. When it comes time to contribute to it, however, you will rarely see rich white people do a better imitation of Deion Sanders (circa 1989) with respect to the speed in which they haul ass away from you.

Sapna Maheshwari (Buzzfeed Business): the skill set for founding a great brand is extremely different from the skill set required to run a successful publicly-traded company — and investors have finite patience for founder antics.

John LeFevre (GS Elevator): Airline prices don’t even go down if the dollar rallies, oil shits the bed, and planes fall from the sky. It probably won’t matter what your 1st wife’s mother looks like. The boos usually come from the cheap seats. Sure, money’s something we only need if we don’t die tomorrow, but most of us live a long ass time. Shut up about the evils of wall street culture, life is a casting couch. For every action, there is a social media overreaction. Slaves made my iPhone, and I’m okay with that.

Ben Carlson (A Wealth Of Common Sense): almost everyone in the markets these days tries to portray their opinion as being contrarian, but very few people actually position their portfolios to match those contrarian opinions. Also, be nice to people. Being a jerk is no way to go through life.

Skirt (Talk To Skirt): in technology, innovation is a bigger screen; in healthcare it’s a cure for HepC; in banking it’s dragging your balls across broken glass to get a deal.

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Thanks guys! Love you all!

What did we miss? What did you learn in 2014? Who had the best lesson of all in this post? Tweet from the link below!

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