MICHEL PIREU: Invest as professors do and not as they espouse and elucidate
They might know a thing or two about finance, but most play it safe with their own money
Plenty of high-profile people are more than happy to share their views on the state of the market and give advice on the best course of action. However, much of the time what they say in public has little to no bearing on how they manage their own portfolios. Client letters, television appearances, interviews and speeches tell you a lot about someone’s personal convictions but usually very little about the extent to which they are willing to act on them. In 2008, Jason Zweig wrote a piece for The Intelligent Investor in which he argued that you may be better off listening to experts rather than trying to do what they do. The basis of his argument was a survey conducted by Colby Wright, then a scholar at Central Michigan University, of more than 600 finance professors at leading US universities to see how they go about investing their own money. As it turned out, most kept things simple and aligned to theory. They did little or no stock picking and avoided options, futures and the li...
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