Monday, November 9, 2015

Traditional Recipe for Disaster

As Thanksgiving rapidly approaches, I thought I would share a recipe I was given long ago. As I transitioned from Middle School to High School I was entrusted with this hardy document. Today I'd like to share it with you in the hopes that my fellow financial farmers make sure this recipe never makes it to their tables for any type of celebratory dinner.

No doubt readers of this prestigious blog also read lesser publications like the Wall Street Journal or Barron's that have featured in recent days numerous hedge fund meltdowns, all of them seemingly following the Traditional Recipe for Disaster to a tee; troubling given the immense asset bases they are entrusted with and also kind of odd given that a hedge fund by definition should have a HEDGE against the very position(s) they are long. (But what do I know, I'm just a lowly financial farmer investing in boring industries that pay me consistent dividends, have strong left to right charts, and I'm knowingly biased towards companies that report GAAP earnings.)

So download, print, and post this recipe somewhere you can enjoy the year-round; it's never to early to learn what can destroy your financial farm!