What Plaxico Burress Teaches You about Portfolio Management

Giants wide receiver Plaxico Burress will face weapons charges after shooting himself in the leg at a nightclub Friday night. Burress is one in a long list of professional athletes making news in the last few years that contained the words nightclub and gun. These situations happen so frequently that it must almost be statistically significant.

If these guys removed their gun from the equation I suspect there would be less shooting. If they did not go to the nightclub, then the odds of gun trouble would diminish greatly. But for some reason they want to go to nightclubs, and when they go they want to take a gun. Maybe they can't help themselves?

Market participants do things in their portfolios that are the equivalent of going to a nightclub with a gun. This can include intentionally lopsided bets, panicking out at the bottom, panicking in at the top, getting talked into doing something by reading an article or listening to someone on TV.

Everyone goes to a nightclub now and then, but if you don't go often and you don't take your gun with you, you're probably going to have fewer problems in your portfolio.

Comments

[Gerry Sullivan:]

As the old adage goes, don't shoot yourself in the foot.

2008 Dec 03 07:21 AM

[Lincolnpark:]

Roger, this is a wonderful and timely bit of wisdom! I sent it to both of my college age sons. You could probably expand this idea into a best-sellling investing book.

2008 Dec 03 07:32 AM

[blisterchicken:]

Yeah, it's sad that dorks like Burress are out there giving money a bad name.

There are so many more positive things you can do with money besides guns & nightclubs.

Like fake guns & indie film for instance!

Probabaly make a decent indie film that turns a profit for a month's worth of his BS.

2008 Dec 03 11:16 AM

[joes:]

Very clever article, what it indicates is that is that there is a series of actions that people who aren't in the situation can't see, but people outside the situation see easily. These are often characterized by the outsiders saying "I would Never do that" or "What an idiot".

The reality is that we all have situations where we do what others say they would never do and at times we are all idiots.

This is a simple explanation of a very difficult and dangerous characteristic of us Human Beings.

2008 Dec 03 11:35 AM

[jackooo:]

Your at the top and you blow it. I have no pity for him or the steriod users.
How dumb can you be. The everyday man struggles to pay his bills and keep his job. These clowns are paid fabulous salaries and what????

2008 Dec 03 11:38 AM

[Dirk Sterling:]

For jackooo, it's you're, not your.

2008 Dec 03 12:45 PM

[dj10:]

Plaxico actually did better than most others in his situation, namely a dumb celebrity at a nightclub involved in a shooting. He didn't shoot someone else. He should stick to catching bullets.............pa... from Eli.

He should trademark his name. A Drug company might use it one day.
"I'm taking Plaxico 2x daily"

2008 Dec 03 01:38 PM

[jackooo:]

Thanks Dirk... I get excited sometimes.

2008 Dec 03 01:53 PM