Category Archives: Goals

The Opportunity Cost Of Information

I’ve been struggling a lot recently with the opportunity cost of information. There are times when I’m tempted to spend an entire day weeding through my Google Reader subscriptions…but would that really make me a better investor? I’m usually reminded of this after I send others any interesting posts I come across.  The majority of responses consist of “That’s great…now how is this actionable?” The question never fails to stop me in my tracks, and it continually drives me crazy because its true.

David Merkel over at Aleph Blog attributes reading from many different sources as his #1 investment idea generator – which is certainly true. I’ve written in the past one of my main motivations to read unconventional blogs is to get a sense of what possibilities exist in the market that I may not realize on my own. That said, as I’m writing this post with 317 unread blog posts in my Google Reader, how much is too much? What percentage of these blog posts are actionable and will make me a better or more profitable investor?

Ultimately, pushing to read more articles each day simply gives me a false sense of security. Certainly, the more I know about people’s opinions of market trends and action the more likely I am to make money…right? I’ve yet to be convinced. What really helps me make progress, learn lessons, and take action is when I sit down to write a blog post of my own. It forces me to string together several articles and generate my own ideas on which I can take action. I’m able to send it out to various people in my network and receive feedback. Not only does it help me generate ideas, but I certainly have to put in my due diligence in order to prove my point. If I can’t sell it to others, why would I commit my own money to it?

By reading all 317 of these posts, what am I neglecting to do that would truly be actionable or beneficial? Personally, I think I miss out on networking and publishing my own blog posts. I’ve done a ton of networking over the years, and I actually really enjoy it. My favorite type of person to meet is the relatively older gentleman that’s already made it in life. He still works because he enjoys what he’s doing, but his main focus is spending time with the grand-kids. These guys have nothing to prove and simply tell it like it is. It always amazes me how little they care about the latest trends and fads going on in the market. They’ve seen a million come and go in their day. They take an objective approach to everything, which I truly admire. I think it’s incredibly important to get out and meet these people in person. Their knowledge, experience, and advice will never be conveyed in a blog post.

At the same time, I’ve been trying to limit my blog post intake and focus more on reading primary newspaper articles. While it may be more entertaining to read blogs, it’s difficult to disagree with a “successful/well-known” person’s interpretation of the market. Instead of knowing so much about which bloggers are bullish vs. bearish, I’m making a commitment to read newspaper articles about recent events and generate my own opinions and expectations in a blog post – which should lead to increased action. I love blogging my thoughts because it ensures everything I publish is well thought out and readers do a great job finding holes in my logic or pointing out opposing viewpoints. The action of blogging certainly creates a great habit of shaping and expressing my own opinions.

I’d love to hear your personal opportunity costs of information in the comments section and spark some debate!

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