 | | What's really behind your investment success? | | |  | | | Kim Iskyan
Publisher,
Stansberry Pacific Research | | Are you brilliant and you'd be a star performer regardless of the circumstances... or are you just kind of smart and lucky - the beneficiary of a good process and strong colleagues?
Make sure you ask that before you give your money to a hot money manager... or before you put too much faith in that recent hot streak you've had.
Why? For example... Phil Jackson.
Was it Phil Jackson... or Michael Jordan?
Phil Jackson is arguably the most successful coach in the history of (American) professional sports. Between 1989 and 2010, he coached the professional (NBA) basketball teams the Chicago Bulls and Los Angeles Lakers to a total of 11 championships. Jackson's unprecedented success fostered his popular perception as a transcendent sports and motivation guru.
Helpfully - critically - Jackson's teams included some of the greatest players to ever bounce a basketball, including Michael Jordan and Kobe Bryant. | This Biotech Stock Is About to Go Ballistic Biotech stocks on the cusp of a major breakthrough can make you an absolute fortune. Early investors in Celgene could have turned a tiny investment into $76,000.
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Jackson couldn't re-create his magic, and the Knicks flailed. The coach wound up publically trading barbs with the only good player on his team. Meanwhile, a revolving door of coaches couldn't live up to Jackson's expectations.
The Knicks didn't come within a mile of the playoffs, and after three years Jackson was fired in 2017. The man who'd written a book called Eleven Rings: The Soul of Success failed abjectly.
And then there's the bond world's version of Phil Jackson, bond portfolio manager Bill Gross.
Was it Bill Gross... or a bond market boom?
Until recently, Bill Gross was the bond world's version of a rock star. The "bond king" co-founded Pimco, one of the biggest asset management companies in the world, in the early 1970s, and rode a multi-decade bond bull market. Gross repeatedly posted outstanding results for the US$300 billion (that's just a bit less than the GDP of Hong Kong) bond fund that he managed. Known for his bold claims, swashbuckling style, and media savvy, Gross was on centre stage.
Then, in 2014, Gross - who by all accounts not an easy guy to work with - was forced out of the firm he'd founded. Gross joined a competitor... and the magic deserted him. Investors didn't follow him to his new company, and he managed less than 1 percent of the assets that he had previously. Gross' investment acumen also deserted him, and his portfolio's performance was dismal.
Gross retired earlier this month, with the fund he managed holding less than US$1 billion in assets. (However, according to the Financial Times, most of that was his own money... so we can't feel too badly for the former bond king.)
What happened? Part of the problem was that Gross didn't have the research infrastructure of Pimco to support his investment ideas. And his market calls were just plain wrong - after decades of being right. | The Stock of the Century - Buy This Stock RIGHT NOW!
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Was Phil Jackson just lucky to be coaching the best basketball players in history... and could anyone have won 11 championships with Michael Jordan playing for them?
Was Gross' previous success a happy confluence of smart colleagues, a big bond bull market and effective public relations? Or were the final four years of his career just an anomaly?
Luck has a lot to do with success, of course (just ask Bill Miller). It's the luck of the circumstances, of the people around you and of the market
So what?
So what does this mean for investing?
There are some things you can control - and a lot you can't control. Maybe you're brilliant... you're surrounded by smart people... and you have world-class processes in place. But few of us do... there's a reason that there's only one Phil Jackson and one Bill Gross.
So be sure that you control the things that you can. I'm talking about obvious things like sticking to your stop-loss limits... coming up with good ideas... diversifying... buying cheap assets... and hedging with cash.
You won't become Bill Gross (or Phil Jackson) by doing that. But you'll do a whole lot better than most people.
Good investing,
Kim Iskyan
Publisher, Stansberry Pacific Research
P.S. My friend and colleague Brian Tycangco has his process down cold... a process he's been perfecting - and using - for years. And he's letting you in on it with a brand-new trading service called Extreme Growth Trader - launching this week. Brian's a very smart guy... and I'm convinced that applying his smarts though his system will generate extremely impressive results. Keep an eye on your inbox for more information. | | | | | | | | | | | | Kim Iskyan is the publisher of Stansberry Pacific Research. He has lived and worked in ten countries including Spain, Russia, Sri Lanka and the United States. Along the way, he's learned something about how markets work... and what matters (and doesn't matter) in the world of investing. Kim has been a stock analyst and research director for a big emerging market investment bank, managed a hedge fund, and sold mutual funds to private bankers. He's also advised Fortune 50 companies on political risk and helped build stock exchanges from scratch in countries that few people could find on a map. | | More From Asia Wealth Investment Daily | | | | | |  | | 3 investment mistakes that could cost you big time | | By Kim Iskyan | | Everyone likes being proven correct. Most people look for information and insight to confirm what they already believe - and avoid information that challenges their pre-existing beliefs. | | | | | | | | | |
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