As if investors need anything else to worry about these days, news recently surfaced that one of the ten recently deported Russian spies was a financial adviser.

"Indeed, for the past 13 years, Ms. Murphy, whose real name is Lydia Guryev, worked as an adviser at Morea Financial Services Inc. in New York, where she reportedly earned an annual salary of $135,000. She was also a certified financial planner and a member of the New York chapter of the Financial Planning Association."

I guess it shouldn't be too surprising that the financial industry attracts more than its share of greed and corruption.

Read the whole story

"People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction."

-- 1 Timothy 6:9

I am rereading Global Investing, one of the best accounts of financial market history ever written.

"Do not fear" appears in every book of the bible.

Greed is mentioned more than a few times as well.

There's definitely an investing lesson here...

"He deprives the leaders of the earth of their wisdom, he sends them wandering through a trackless waste.  They grope in darkness with no light.  He makes them stagger like drunkards."

"It ain't what you don't know that gets you into trouble.  It's what you know for sure that just ain't so."
-- Mark Twain

As humans, we tend to have a very high opinion of ourselves, particularly when it comes to overestimating our skills and abilities.

This is abundantly apparent in our attempts to predict the future.  It's a particularly dangerous exercise when it comes to investing because not only are we woefully bad at predicting outcomes, but even when we get it right, it only "counts" if we were right and the market consensus was wrong (if we know something that everybody else knows, it's not terribly useful).

How much do you think you know about the future?
Cut it in half.  Ten times.  Now you may be close.

"Since no man knows the future, who can tell him what is to come?"
-- Ecclesiastes 8:7

"The race is not to the swift or the battle to the strong, nor does food come to the wise, or wealth to the brilliant, or favor to the learned, but time and chance happen to them all."
-- Ecclesiastes 9:11

"Cast but a glance at riches and they are gone, for they will surely sprout wings and fly off to the sky like an eagle."
-- Proverbs 23:5

Build an investment plan based on an unknowable future. 
Have a healthy respect for uncertainty.

Think you're a genius?  Find out with a short, psychometrically valid IQ test.  But don't invest based on a high IQ (yours or anyone else's).

MENSA, the organization whose membership is limited to those who test in the top 2% of IQ's, had (and may still have) an investment club with shockingly bad results.

From Eleanor Laise’s article “If We’re So Smart, Why Aren’t We Rich?, Dow Jones Newswire, May 15, 2001:

"The club's recent record has been nothing short of a fiasco, thanks to an overweighting in trendy tech stocks and pitifully bad timing… all told, the club saw the value of its assets fall by more than 40 percent over the past 12 months. One member said 'we can screw up faster than anyone else'; another, a member since the mid-1960s, describes its investing strategy as 'buy low, sell lower...'  From 1986-2001, the club’s investments returned an average of 2.5 percent a year (versus, for example, the S&P 500’s 15.3 percent)."

Ouch.

And let's not forget the Nobel Laureate rocket scientists who brought the entire U.S. financial system to the brink of collapse via the hedge fund, Long Term Capital Management.

"For the foolishness of God is wiser than man's wisdom, and the weakness of God is stronger than man's strength."

1 Corinthians 1:25

"May I never boast except in the cross of our Lord Jesus Christ, through which the world has been crucified to me, and I to the world"

Galatians 6:14