Re: Investments

Max More (
Thu, 22 May 1997 09:33:13 -0700

At 02:25 PM 5/21/97 -0400, Perry wrote:
>2) You don't even have to think much to make money in the markets:
> passive investments like buying into an S&P 500 following mutual
> fund do bring their investors excellent returns.

I read an article (in Fortune, I think) that warned investors to be careful
with index funds based on the Dow or the S&P 500. The writer noted that
these stocks may be overvalued because index investing has become so
incredibly popular that these stocks just keep getting pushed up. The
writer suggested broader index funds, such as those based on the Wilshire
5000. I'd be very interested to hear comments on this.

>4) People who have a slight information edge -- like understanding
> what a high tech company does -- can sometimes get an advantage
> even if they aren't full time investors.

Yes, if only I'd known more about Dell a year ago...

Warren Buffett's approach makes a lot of sense to me. It's too bad that he
doesn't know much about high tech and so won't invest in that area. My one
and only investment so far (Coca Cola) was inspired by Buffett, though I
think I should have gone with Microsoft, as I almost did but it's price was
relatively high at the time. I'm happy so far though: I bought my few
shares of stock a month ago. It's up 13%, so I can boast -- for now! -- of
an annualized return of 156%.

Given a Buffett approach, perhaps an investment club could serve as a way
of spreading expert knowledge on particular companies among people in the
group. Of course there is no guarantee that someone who claims to be an
expert on Company ! really is an expert, but this might be a reasonably way
of figuring out which stocks to pick, when you're not satisfied with boring
but sensible index funds.

For those who haven't come across it, I recommend Microsoft Investor as a
fine way to keep track of investments. Unfortunately, while expanding its
features, Microsoft are about to start charging $9.95 per month for it.


Max More, Ph.D.
Author: The Augmented Animal (Forthcoming: HardWired, 1998)
President, Extropy Institute, Editor, Extropy,
(310) 398-0375
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