Investing Insights

Investing Insights: “Making Money when the Music Stops”


A well-known aphorism teaches that a picture is worth a thousand words. When it comes to high-end investing, sometimes one insightful quote from an investment pro is worth thousands of paragraphs from the pages of financial magazines, academic journals or stock market how-to books.

Considering that economics has been called the “dismal science,” the fields of economics and finance have a remarkably high concentration of quotable sages. Often a single line from one of these great thinkers is more illuminating — and worth more in the market — than the most widely-embraced conventional wisdom.

Of course, with investing, the proof is always in the pudding. Or, as the title of a classic book written in 1940 by a former broker asked: Where Are the Customers’ Yachts?

Fred Schwed, Jr. ’s timeless book began with the following lines: “Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor. He said, ‘Look, those are the bankers’ and brokers’ yachts.’ ‘Where are the customers’ yachts?’ asked the naïve visitor.”

It’s still a question worth asking.

Beginning in the early 1970s, some of the pithiest financial insights could be found on public television in the U.S., where journalist Louis Rukeyser hosted Wall Street Week. Known equally for his charm and dry sense of humor, he once quipped: “In Wall Street, the only thing that’s hard to explain is next week.”

In the face of a market sell-off, he famously advised: “Don’t just do something, stand there.”

As usual, the guidance was both spot-on and amusing.

On another occasion he told his viewers, “Roaming the world as a foreign correspondent for more than a decade, I was able to observe how a variety of vastly different nations organized themselves economically. The inescapable conclusion was that no politician anywhere on the planet has ever actually created a rupee’s worth of prosperity.”

Although less droll, Warren Buffet has rivaled Rukeyer’s insightful wit over the years with his own memorable maxims. He once said, “The stock market is a highly efficient mechanism for the transfer of wealth from the impatient to the patient.”

In Canada, top investors often stay tuned to what a leading hedge fund manager has to say about markets and overall economic conditions.

Moez Kassam is the Chief Investment Officer at Toronto-based Anson Funds. The quotable Anson Funds executive once told Barron’s: “When everyone is excited about something, we usually look at the other side.” In the same interview, he counseled: “The best ‘insurance policy’ for investors is a hedge fund that will still be making money when the music stops.”

In a piece published in Forbes, the Anson Funds co-founder instructed: “We’ve adopted our strategy not to just look at fundamentals but also sentiment on Stocktwits, Twitter and other platforms. These guys tell you what they think, they coordinate with each other, and they have scale. You have to pay attention. This community is younger and more wired. You need sophisticated methodologies to translate this information into a hypothesis about the direction of a stock price, and that’s what we do.”

At the end of the day, perhaps no one can compete with the cryptic wisdom from another keen observer of markets and trends, that great financial scholar, Yogi Berra:

“If you don’t know where you’re going,” he advised, “you might not get there.”