I’m doing a live interview Friday (today) — listen in

April 6 8 Comments latest by Wise Bread

Quick link: Listen to me being interviewed, live, for an hour starting at 11am Pacific today (Friday, 4/6).

I’m being interviewed by Pamela Slim (who was one of my most popular Friday Entrepreneurs interviewees ever) today at 11am Pacific. This will be a live interview and you can stream it online, free.

We’ll be talking about iwillteachyoutoberich, PBwiki, my book deals, and my thoughts about entrepreneurship. I’m usually bad at keeping secrets on live interviews, so I might let a few things slip about future plans here.

The interview is today and will be streamed live.

• Time: 11am-12pm Pacific
• Date: Friday, April 6th (today)
• Details about the interview here
• Direct link to the streaming interview here

If you miss it live, there will be an archive of the chat up there soon after the interview.

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The media is atrociously bad at prediction and I’m sick of it

April 5 31 Comments latest by La crise financière… - Sandbox

[This is part of the IWillTeachYouToBeRich Week of Discontent.]

I’m so sick and tired of financial and business magazines that I could vomit. It’s absurd to see yet another “10 Stocks You Must Buy in 2007!” issue of a magazine. I just point, laugh, and walk by whenever I see these. This is a little ironic considering I was featured on MarketWatch.com and Yahoo Finance yesterday, but oh well.

Why do I ignore and mock the media for predictions about stocks and business?

1. They’re often wrong. These magazines are designed to sell magazines, not good financial advice. Take Fortune’s 10 Stocks to Last the Decade, a sexy-sounding article that truly goes the distance by including stocks like Broadcom, Nortel Networks, Enron, and Charles Schwab. Now look at the results.

There’s also a curiously amusing 2003 study by McKinsey, the top management-consulting firm in the world, which concluded that Google was not a serious threat:

Few at eBay initially saw reason to fear Google…in part because of a 2003 study it commissioned from McKinsey & Co. McKinsey concluded that Google wouldn’t use its search capabilities to break into e-commerce. That made Google a manageable threat, say people familiar with the study.

Oops.

Let’s not forget BusinessWeek’s accusatory 2001 article, in which it wrote: “Sorry Steve, Here’s Why Apple Stores Won’t Work.” TheStreet.com chimed in, writing, “It’s desperation time in Cupertino, Calif.,” and consultant David Goldstein predicted, “I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake.” Ironically, Fortune gleefully catalogued how wrong these predictions were while ignoring its own constant failures of prediction.

I’m not knocking the difficulty of prediction. It’s really hard. That’s why I don’t do it, and that’s why I scoff at magazines whose entire value proposition is “predicting” what will be hot next. They simply aren’t worth the $4.95/issue they charge.

2. They’re not accountable. The problem isn’t just being wrong, it’s not being accountable. These magazines will literally laud a CEO one year and then turn around and write a negative slam piece haranguing the same person immediately afterwards. Note BusinessWeek’s cover story of Bob Nardelli, CEO of Home Depot, in March 2006, where they gushed,

Skip the touchy-feely stuff. The big-box store is thriving under CEO Bob Nardelli’s military-style rule…Chief Executive Robert L. Nardelli is putting his stamp on what was long a decentralized, entrepreneurial business under founders Bernie Marcus and Arthur Blank. And if his company starts to look and feel like an army, that’s the point. Nardelli loves to hire soldiers. In fact, he seems to love almost everything about the armed services…It’s hard even for Nardelli critics, including ones he has fired, not to admire his unstinting determination to follow his makeover plan in the face of scores of naysayers. They describe being “in awe” of his command of minute details.

Riding a housing and home-improvement boom, Home Depot sales have soared, from $46 billion in 2000, the year Nardelli took over, to $81.5 billion in 2005, an average annual growth rate of 12%, according to results announced on Feb. 21. By squeezing more out of each orange box through centralized purchasing and a $1.1 billion investment in technology, such as self-checkout aisles and in-store Web kiosks, profits have more than doubled in Nardelli’s tenure, to $5.8 billion.

Really? That’s interesting, because 9 months later, in January 2007, BusinessWeek ran another cover story:

Out At Home Depot: Behind the flameout of controversial CEO Bob Nardelli. How convenient. As BusinessWeek noted in its carefully worded article,

The sudden fall of one of America’s best-known CEOs illustrates how perilous times have become for corporate leaders…During the current housing slowdown, however, the financials have eroded. In the third quarter of 2006, same-store sales at Home Depot’s 2,127 retail stores declined 5.1%.

Perhaps it illustrates how poor of a reporting job the magazine did, including its breathless, sycophantic writing and lack of accountability.

The flip-flopping goes on from the publication level down to the reporter level. Now, changing your mind is certainly ok–but not when you don’t acknowledge that you wrote something completely opposite less than 24 months prior. For example, in August 2005, a Fortune reporter wrote the following bombastic statement about Yahoo:

By figuring out how to make brand advertising work online, Terry Semel is on the verge of creating the 21st century’s first media giant.

In January 2007, the same reporter, this time writing for Wired, wrote an article of a decidedly different color:

How Yahoo blew it. Semel has been Yahoo’s CEO for nearly six years, yet he has never acquired an intuitive sense of the company’s plumbing.

Or maybe it’s Jim Cramer’s TV show, which offers predictions that are sexy but no better than chance.

You can also find a delightful lack of accountability with all the pundits who predicted a housing boom or crash. Try digging around for the official spokesperson of the Realtors of America. Their words are comically positive no matter what the situation is. In another example, Robert Roubini, president of Roubini Global Economics and some pundit, predicted a 2007 recession, the likes of which we haven’t seen in over a decade: “By itself this slump is enough to trigger a U.S. recession: its effects on real residential investment, wealth and consumption, and employment will be more severe than the tech bust that triggered the 2001 recession.” Hmm.

3. To avoid being wrong, many magazines write meaningless articles that don’t say anything. I’d rather have a reporter take a stand — whether he’s right or wrong — and acknowledge how accurate he was a year later. Instead, some reporters are afraid of being wrong, so they write articles that don’t say anything. Can’t be wrong if you can’t be pinned down! Here’s a great example of a meaningless article that says nothing.

4. They ask pundits who have no business talking. When I see John Doe of John Doe Capital quoted (as you see one paragraph above), I tend to get a little wary. Frankly, I get wary of any pundit making predictions. Here’s a hilarious video poking fun at Wall Street research by asking homeless people on “Wall Street” what their top 5 stock picks are. It’s well worth your time. Are the predictions by business magazines much different?

5. Finally, these articles about the next big investment are minutiae. Think about all of these articles on Hot Stocks or The Next Business Trend. Do they let you focus on what’s really important, or do they get you caught up in the hype of the day? Here, as one example, is a page with 82395423 different management theories. The funny thing is, this page isn’t even a joke.

Reading these magazine articles and watching CNBC is fun and entertaining, but if you’re really making your decisions exclusively from a glossy paged magazine, you are a humongous moron. The unfortunate result is a bunch of people buying stupid loaded funds and stocks they don’t understand. And, on the other side of the spectrum, you get people like this who are so intimidated by all the handwavy financial punditry that they simply opt out of investing altogether.

Investing for the long term isn’t hard. Yes, it takes work, and yes, it takes some common sense. It doesn’t take the hottest stock tip of the month. Whatever that magazine article says this year, it could literally say the opposite next year and you’d never know the difference. Take some time and do some god damn research on your own. Jesus.

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31 Comments latest by La crise financière… - Sandbox

Free chapter from Ramit’s 2007 Guide to Kicking Ass

March 23 8 Comments latest by I Will Teach You To Be Rich » Ramit’s 2007 Guide to Kicking Ass

Late last year, I released my first ebook, Ramit’s 2007 Guide to Kicking Ass. Today I’m releasing another chapter from the ebook, “Money Day,” in which J.D. Roth of Get Rich Slowly (a great personal-finance blog) writes about getting your finances organized in just one day. Best of all, he recommends his favorite companies and sites to get it done.

But first, a little feedback from the ebook, which has gotten a great response. When I launched it in December, hundreds of people bought it within 48 hours. Here’s what some of them had to say:

• “Producers, Consumers, and Information Diet pointed out something in my own life (i.e. I was consuming too much). I’ve gone on an information diet and my productivity level has reached nine thousand.”

• “I’ve never done well with making introductions via email. Your template made this easy. I’ve already used it twice this week.”
• “Lots of stuff on how to run teams. Good balance between inspirational (soft) and hard writing.”
• “You brought views in from outside of I Will Teach You To Be Rich. It had a very professional look and feel, almost to the point where it would’ve been worth charging more for it!”
• “The information Diet was an interesting topic. I realized that I need to go on one. I read all this facinating information, but I never use it to make anything.”
• “The fact that it wasn’t wrapped in DRM or something similar. I liked that you trusted your readers enough that we didn’t have to jump through 50 hoops to get to the eBook. I think it was just the right size.”
• “The essay called “The Key to Running a Great Project” was something I find completely applicable to my life: I am a graduate student who is overwhelmed by school and at the same time, I am launching a site with a friend. We constantly have to find milestones that will help us keep our momentum.”
• “I LOVED the graphics!”

Then I asked, “What have you done differently after reading the ebook?”

• “Getting my contact list updated and actually get my side business going and not talking about it so much.”

• “After a month of my senior projects starting to stall, I gathered my team together and discussed 3 important, but manageable, objectives to accomplish over the next 3 weeks. This caused a positive shift in momentum, allowing us to finish the project on time.”
• “I helped one of my friends looking for a job network with another friend of mine by sending an introductory email. Several days later someone else ended up doing the same thing for me.”
• “I have begun to invest for my retirement and have a plan to make contributions, no matter how modest, to my account each month.”
• “I have scheduled a time with my dad for next week to sit down and learn Quicken, set up a clear (as opposed to my rather ambiguous budget, which isn’t really a budget at all…) budget, and to change banks. Call it my Money Day, with some help from someone I financially respect.”
• “It’s helped me realize that my contacts are indeed invaluable. In fact, right after I read K’s essay, I e-mailed 6 or 7 people that I had forgotten to send my updated contact info to.”

Get it
The newly released chapter is free to download. If you want the entire ebook, it’s $4.95. One more thing: If you don’t love it, just let me know and I’ll refund 100% of your money back.

Check out Money Day, the newly released chapter, and the entire ebook here: Ramit’s 2007 Guide to Kicking Ass

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