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Wednesday, August 4, 2010
Karen Damato has written a nice profile, "A "Dilbert" Guide to Funds", on Scott Adams, the creator of the Dilbert comic strip.
Scott Adams has an MBA and is a financial analyst. Thus, when he has Dogbert make fun of the mutual fund business, people take notice; and those in the investment community relate. The article also reveals a distaste for active management: "But Mr. Adams has sworn off using professional advisers to oversee his money." For several years, Wells Fargo & Co. managed half of his portfolio, and he says he ended up with a "shockingly" large sum "in companies that weren't even real companies, like Enron and WorldCom."(My bolding.) In fact, Scott Adams did better as a do-it-yourselfer.
Ms. Damato emphasizes that Scott Adams expresses his approval of exchange traded funds by avoiding them in the strip. He says, "...from his perspective as a cartoonist, "there has to be something broken in order to get a joke out of it."
This is an excellent piece to copy and give to friends who are skeptical of the do-it-yourself approach and exchange traded funds.
If you have an advisor who picks individual stocks for you, the question you have to ask yourself is how well does your advisor understand the companies he is investing in. Like Scott Adams, many investors ended up holding Enron (and employees lost their life savings) despite the fact that they were clueless about what the company, and especially Mr. Fastow, were up to. Many self-proclaimed stock pickers got caught up in the hype. This isn't what people need for their retirement funds.