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Giving your thinking a slap in the head

The other day I got a call from a woman I’ve spoken to a number of times over the years, one who always seems to be near the centre of whatever’s happening in farming and the grain business in Saskatchewan.

She wanted to know whether or not it was worthwhile for her to subscribe to a markets newsletter I’ve discussed a number of times here and in the paper. She’d been receiving free daily email bulletins from this company, but you get what you pay for and the freebie newsletters are really just teasers for the paid products. So she wondered if it was worth getting the real stuff.

I’m a delighted subscriber to this newsletter, but I had to pause and think before recommending she subscribe herself because it’s a pretty out-there publication. I read a lot of stuff that’s outside the mainstream of markets and financial thinking, but the one she called me about is always the best-written, most interesting and most provocative of the fringey stuff that floats about on the edge of the markets. But it also makes pretty wild calls and strong suggestions of (to the mainstream folks) radical actions that fly in the face of orthodox advice, so you don’t want to recommend it to folks who are likely to follow it blindly without critically assessing it themselves. Some people are always looking for a new messiah, and you don’t want to pass them off to a charlatan.

Fortunately, this particular publication may be way-out-there, but it’s also based on solid thinking and has often been very right for the right reasons. So I didn’t have trouble recommending it on that basis. And this woman has a good mind and the critical ability to assess something herself and isn’t likely to become a blind follower of anyone or anything. So I wasn’t worried on that count.

But it made me think about the main problem with marketing advice and investment advice, which is that there are profoundly different sorts of folks out there who need investment advice and each approach will only work for a particular sort of person, and be a disaster for the rest. There are those who need to be led by the hand and told exactly how to market their crops or invest their RRSP money, because they know they don’t know enough themselves to make good marketing and investing choices. (This can be a very wise way to be for most folks – if you find a good advisor.) There are those who need to be protected from their own gambling nature and forced to sell their crops or invest their money in a more disciplined manner. (This is something desperately needed by thousands of farmers, who are by nature gamblers and sell in the bottom third of the market because they get the roll of the dice wrong.) There are those who want to see a range of reasonable options and take the one that seems most prudent. And there are those who enjoy surveying the vast expanse of contrasting views and hacking their own course through it, knowing they are taking lots of chances based on their own wisdom.

For some of the more passive or gamling-addict folks, reading the way-out-there stuff could be upsetting and discombobulating, because these publications offer radically opposing views on what you should be doing with your crops or money. They could throw you into paralysis or into making a series of wild gambles with no underlying strategy. There’s no consensus amongst them, and you won’t be able to easily find any common ground. You’ll have to choose which one you actually agree with, know why you agree with them, know what the flaws in this type of thinking may be, and understand why you don’t agree with those thinking the opposite. That’s not something most people have the time, patience or interest for doing.

But for those who enjoy sorting through the contrasting views of market gurus, won’t get a headache from having to balance severe polarities in their brains, don’t mind paying subscription fees and think it’s worthwhile surveying the full range of views, here’s a starter list of some of the more readable and provocative newsletters that talk about commodities: The Gloom, Boom and Doom report by Marc Faber; The Elliott Wave Theorist by Robert Prechter; Basic Points by Donald Coxe (free to certain BMO clients); publications by Jeff Rubin of CIBC; anything uttered by Jim Rogers (go to www.youtube.com to see his recent appearences on CNBC, Bloomberg, etc.); commentary by David Tice of the Prudent Bear fund.

Much of what most of these folks think and say I disagree with – and sometimes I argue with my computer when I read their writings, making me seem like a crazy person to those around me – but a couple of them I find I generally agree with and it’s always a pleasure to find someone who thinks along the same lines as you, just in a much more profound manner and in a better-worded way. (Right now I’m enjoying the fact that the two I agree with the most are in complete conflict on the fundamental question of whether we’ve entered an inflationary or deflationary era, a question that’s been hanging out there for more than year. It’s a question that keeps getting itself asked.)

But perhaps the most valuable experience is reading analysis you completely disagree with, but which is well-argued and which makes you work hard to counter. As much as it’s a pleasure to read stuff you agree with, it’s a much more rewarding experience to read stuff you don’t agree with and which forces you to justify your disagreement. If you can’t figure out why someone’s wrong on something, you’ve got to wonder if you’ve really thought out your own position. And that’s much more likely to improve your thinking than just reading stuff you agree with.

So what I said to this woman was yes, it’s a worthwhile subscription, because it’s far different analysis and advice than you’ll read anywhere else. It’ll broaden your options. And even if you totally disagree with everything this guru says, it’s the best and most worthwhile disagreement you could have for $30 per month, like a contract with a brutal personal trainer who’ll put you through a grueling weekly workout that you dread, but that leaves you trimmer, tougher and fitter.

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