NFL Draft Complete…Now More Predictions..

Well the 2016 NFL draft is complete and my Green Bay Packers have made their selections. I wonder if anyone will compare the predictions with the actual picks.

Many ‘experts’ gave their predictions of which player each team should choose and why. It’s funny that none of these ‘experts’ are held accountable to their predictions. Because they are seen again and again as ‘experts’.

Now the analysis of grading the teams on their picks. I’m guessing it’s based on the same experts that predicted who they should pick.

What these ‘experts’ fail to realize is that the only true analysis is whether the picks help the team win football games. What about team chemistry?

So let’s get this straight first the ‘experts’ predict which players each team should pick. Then they predict which teams made the best picks. This is all followed by picking which teams will win their divisions, then win in the playoffs, then win the Super Bowl.

If we looked at all these predictions we will quickly realize that NO ONE can predict the future. NO ONE can predict which players will be stars. There is no way to consistently predict who will win and who will lose.

And yet the public continues to ask for predictions. Everyone wants to know what will happen next and how it will affect them. Every day we watch the weather forecast often disappointed that the predictions was WRONG. But guess what the next day we will watch the same forecaster. WHY?

To put this all into perspective, there were 253 players chosen in the 2016 NFL draft. There will be stars that were not even chosen playing in the NFL. Why were these players missed?  If all the experts had access to unlimited data on all amateur players. Why were the future stars missed?

Let’s compare that with the stocks available around the world, something like 12,000. How can the ‘experts’ pick which ‘ones’ will outperform other stocks and the market in general? Yet the public continues to watch the financial shows to find the next ‘hot’ stock or asset class.

Investors continue to look for predictions on where and when to invest their money. They watch the business news shows with the same predictors that got it wrong time after time. WHY?

It seems investors believe that investing means getting rich overnight.

These same investors fail to realize that the equity markets are random and unpredictable.

A much better strategy, if your goal is a secure retirement:

  • Own equities and high quality short duration fixed income.
  • Globally diversify.
  • Rebalance

This strategy requires process and discipline. Both of which do-it-yourselfers are in short supply. It requires the guidance of an investor coach/fiduciary adviser.

‘I Will Listen To My Coach’

OK I was on vacation in Arizona last week during the Super Bowl. By the way when I left Phoenix it was 85 degrees and upon arrival in Milwaukee I was greeted to 0. Yes that is 0 degrees.

Today’s message would be a little more, timely had I not been enjoying the sun. While watching the post-game interview with Peyton Manning. I noticed, as did most people that the question of his retiring came up a number of times.

Although Peyton was exciting about winning the Super Bowl he remained composed and gratuitous. He handled the situation with his usual class.

His answer to the retirement question struck me as a lesson all of us can learn from. He said, I will be paraphrasing. “I talked with Coach Dungy before he game. And he told me to not make an emotional decision about retirement. I should take my time and decide in a rational way what to do. I have decided to listen to Coach.”

Investors would be well advised to follow this sage advice. Most investors make emotional decisions with their investment dollars during market extremes.

When an asset class is surging ahead like tech stocks, large cap growth stocks, small stocks, large cap value stocks, emerging market stocks, commodities, gold, and on and on.

These emotional investors will put a large imprudent portion of their investment money into the ‘hot’ asset class. Only to be disappointed which the ‘hot’ becomes the ‘cold’.

The opposite occurs when the markets are in what seems like a relentless decline, like we are experiencing right now. These rational investors will make irrational emotional decisions with their investment dollars.

They will sell or go to the ‘hot’ adviser that ‘predicted’ the decline. Believing that this ‘hot’ adviser will continue their ability to predict the future.

As I have said many times in the past the equity markets around the globe are random and unpredictable. When you find an adviser claiming predictive abilities it is a matter of LUCK and not skill.

Please remember we are all human with the emotions that go along with being human. We need someone to guide us through the huge amounts of information regurgitated by the financial media and the Wall Street bullies.

We need a coach to remind us to refrain from making an emotional decision with our investment dollars.

If you have an investor coach/fiduciary adviser you have the help to guide you through turbulent times. Because while turbulent times are happening it seems like they will never end. We sense that we must get out before they drop to ‘zero’.

Bad times end, good times end, that is the only constant. There have been down equity markets in the past and there will be down markets in the future. It is all part of investing.

I have always found it curious that investors considered crashes of the past to be buying opportunities while current or future crashes are considered risk.

So take some advice from future NFL hall of famer and Super Bowl champion Peyton Manning and “listen to my/(your) coach’.

Does The Number One Pick Guarantee Anything??

As I write this the 2015 NFL draft is in its second day. Here in Green Bay everyone is talking about the number one pick cornerback Damarius Randall. The ‘experts’ are saying why he is a good pick and some are saying why he is a bad pick. In the past, I watched these ‘experts’ for a while until I realized that they have no idea who is the best pick or player. Until the player performs on the field, they have no idea who will be a star.

Brett Favre warming up before a game.
Brett Favre warming up before a game. (Photo credit: Wikipedia)

There was a lot of hype on the overall number one pick QB Jameis Winston from Florida State taken by Tampa Bay. He is said to be a, can’t miss player. Well if you look at history since the draft began a long time ago only 13 overall number one picks have gone on to the Hall of Fame.

There is a lot of hype every year regarding the NFL draft. The experts keep predicting, the public keeps watching. Except for one thing the draft is nothing more than a guessing game.

Our own Brett Favre was drafted in 1989 by Atlanta in the second round as the 33rd player chosen. That means 32 players were seen by the ‘experts’ as better choices. Thankfully in February 1992 Atlanta traded him to Green Bay. Oops! OK I’m biased but Brett did pretty well in Green Bay and will be in the Hall of Fame someday.

Tom Brady will be in the Hall of Fame someday as well. He was drafted in 2000 in the 6th round. That means that the ‘experts’ believed there were over 160 players better than him. Another oops!

The Packers chose Tony Mandarich as a, can’t miss offensive tackle in 1989. He was chosen before the great running back Barry Sanders in the same draft. The ‘experts’ missed again.

Looking back many variables may have changed history. Would Brett Favre have been as great without Steve Mariucci coaching him? Or would Tom Brady be as great as he was/is without Bill Belichick? No one can answer this with any degree of certainty.

Great players have great coaches. In the right setting at the right time, greatness happens.

While talking with investors I am amazed at how often they rely on ‘experts’. To pick the right stocks.  Or help them get into and out of the equity markets at the right time. Or even do their own homework and do it themselves. Without proper coaching these investors are likely to realize disappointing results. It is possible that some will succeed but this will be the result of luck and not skill.

Coaching provides proper strategy and most importantly DISCIPLINE. There will be times when a good coach will have you doing something that they do not want to do. Like buying equities in a down turn. As part of the process, scheduled rebalancing requires selling the good performers and buying the poor performers.

Players/investors become emotional during times of crisis and hype. Without good coaching these ‘players’ will make emotional decisions that go against their overall strategy/plan.

If you are working with an adviser whether human or robo and they allow you to do whatever you want. The fees you are paying are too high no matter how cheap they appear.

Coaching matters over the long term.

Stop empowering the Wall Street bullies. Fire your broker/agent and hire an investor coach/fiduciary adviser.