A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
Two stories this morning support my unshakeable contention that for investors, behavioural psychology is far more important than individual investment techniques.
First, the St. Louis Federal Reserve highlights the dangers of chasing performance, the investor tendency to buy investments solely because they're going up. "Ultimately, this analysis shows that poor investment timing caused by return-chasing behavior has a significant impact on portfolio performance."
"The cost of chasing returns " – St. Louis Federal Reserve
The second story, by the indispensable Psy-Fi blog, argues the importance of humility for investors, who are " far too confident in the face of an uncertain future, and end up paralyzed into inaction when everything goes wrong and we then panic when it's too late."
"Be humble, be wealthy" – Psy-Fi
The unveiling of Apple's new wearable device was met with considerable derision yesterday but, since similar levels of skepticism surrounded the original iPhone and the iPad, I'm willing to give the company the benefit of the doubt.
But only for a little while. The death of Steve Jobs lurks behind every new product cycle and the magic of the Jobs era seems to be fading despite the efforts of the company's design genius Jony Ive.
"What analysts are saying about Apple's new products" – Inside the Market
"Everything you need to know about the Apple watch" – Wired
The Financial Times reports that Chinese companies are storing oil in massive tankers off shore in a disquieting allusion to 2007. Seven years ago, the mass storage of copper in ships in the South China Sea was among the early signs that the financial crisis was going to be really bad.
It's too early to extrapolate the current trend and prepare for an Asian financial apocalypse but the more this happens, the less energy-related risk investors should accept in their portfolios.
"Oil traders squeeze profit from the future" – Financial Times (subscription may be required)
In related, dire news for the commodity complex, Goldman Sachs is predicting the "end of the iron age." Reuters lifts a telling quote directly from a research report by Goldman analyst
Christian Lelong, "In our view, 2014 is the inflection point where new production capacity finally catches up with demand growth, and profit margins begin their reversion to the historical mean; in other words, the end of the Iron Age is here."
"China steel, iron ore futures hit record lows" – Reuters
Tweet of the day from @jmcduling includes an interesting chart: "Where people in the US watch their media content online pic.twitter.com/06UIXprscH "
Diversion: They've identified Jack the Ripper! Wait, no they didn't,
"Are YOU Jack The Ripper? No. And neither's Aaron Kosminski." – Usvsthm
Follow Scott Barlow on Twitter @SBarlow_ROB
Scott Barlow