Articles by Nick Massey

You may not have heard of Edwin Drake, also known as Colonel Drake, but he was an American businessman in Pennsylvania and the first American to drill for oil successfully. He lived from 1819 to 1880, but his legacy has much to do with the high standard of living we all enjoy today.

It seems you can’t read an investment column or watch a business news story lately without hearing about AI (Artificial Intelligence). I’m certainly no expert on this topic, so I can write from the viewpoint of someone who knows little about this technology. But I do know a lot about the cycle that new life-changing technology goes through. Some people say AI is the greatest investment opportunity since the internet. That may well be true, but caution is warranted here.

To be a good long-term investor, you need a certain degree of optimism. Optimism is good, but sometimes you need a little near-term pessimism, or you can end up waiting a long time.

Are you as confused as most people with all the conflicting data and advice from economists and other forecasters? Who do you believe? On the one hand, this, on the other hand, that. Which is it? To paraphrase Harry Truman, “Somebody please find me a one-armed economist!”

It’s been said by some that, with chemotherapy, there is a fine line between killing the cancer and killing the patient. You could probably say the same about the Fed in their efforts to monitor banking institutions. As you probably know from some of my past columns, I’m not a big fan of the Federal Reserve. I haven’t gone on a good ole fashion rant in a while, so here goes.

Mark Twain is often credited with the famous line, “There are three kinds of lies: lies, damned lies, and statistics.” It is a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments.

Over the last 15 years, I have written four different columns on the subject of the debt ceiling. Other than the numbers, nothing much has changed. Here we go again. This would all be quite humorous if it were not so serious.

On Oct. 28, 2007, I wrote a column titled, “The Downside of Protectionism.” “During the Roaring 20s, the world economy benefited from that great era of globalization and free trade. Then, as now, global trade made a lot of people uncomfortable. And in both cases, politicians responded to public sentiment in exactly the wrong way, by attempting to stop or slow foreign competition. There is some danger that they could do it again.”

One of the most dangerous emotional issues in investing is called “FOMO,” or the fear of missing out. It’s probably responsible for a large percentage of losses from investing in things people don’t understand or didn’t at least understand the risks.

Recently, there was a very significant day in stock market history. Thirty-five years ago, October 19, 1987, was one of the most dramatic days of all time in the financial markets. The Dow Jones Industrial Average dropped 508 points, or 22.6%, that day. The Dow went from 2,246.74 to 1,738.74, the largest one-day percentage drop in history. It wiped out 14 months of gains in only a few hours. Black Monday destroyed $500 billion of stock values and $1 trillion worldwide.