Ask Three Questions

I wrote my new book, The Only Three Questions That Count, because I've long thought too many investors take the wrong path because they don't know in their bones that the required path is to know something others don't know.

We learn in finance school that if we don't -- we will sometimes be right and/or lucky, but more often we will be wrong and/or unlucky and overall do worse than if we were simply passive. But year after year most professional investors lag the market. The next year a different minority beats it. In the long term, precious few professionals beat the market because they keep making bets based on something other than knowing what others don't.

Investors act as if investing is a learnable craft. Yet I learned early on that craft doesn't lead you to know something others don't. It leads you to process the same information in similar ways to how other professionals -- who've also learned the craft -- process those same types of sought-after information. Hence, other than sheer luck, folks lag.

When I was young, I saw things in the media I thought were wrong, and I set out to prove they were, and I was right. Years later I realized that was the wrong approach. It was too egotistical and self-centered and didn't teach me anything. I learned that a better approach was to read the media for things I thought were right and see if others thought they were right, too, and then prove we were all wrong. That way I could game everyone. ...