Bad Investment Advice
Bad Investment Advice
January 3, 2014
- You should not take investment advice from cartoonists. Ever.
I’m only posting what follows as a control on my own selective memory. I’m going to publicly describe what I believe is a terrific investment idea. By going public I can’t easily forget my prediction or later deny it happened.
You should NOT follow this advice. Seriously. Also, I own stock in the company I am about to mention. And I just doubled down. So I am not objective. Keep that in mind.
The stock is Turkcell (TKC), the leading Turkish phone company. The stock is getting hammered this week because of government turmoil, currency value, and whatnot.
The stock could stay depressed for years as things get sorted out. But in the long run, will fewer Turks need phone service? Not likely. And the economics of the phone business are well-understood.
I know little about Turkey except that the government seems intent on being a serious, modern country. It seems that every time I hear a story about Turkey it involves them trying to do something that sounds entirely practical. They have a secular government, capitalism, and NATO support. Now they’re rooting out corruption in the government, or trying to. It seems as if they have a natural leaning toward pragmatism.
There’s risk with any investment. Turkey could be destroyed by an asteroid tomorrow. Or cell phones could become obsolete. Or Turkcell’s accounting could be rigged. A million things could go wrong. But that’s true with every investment. If none of the worst case scenarios play out, people will continue to want cellphones and Turkcell is the leading operator in the country. I like those odds.
This investment idea is only the third I have ever had in the “can’t lose” category. The first can’t-lose idea I ever heard came from Sir John Templeton, a legend of investing, back in the eighties. When asked for his best stock pick in the entire world, he said to buy stock in the Mexican phone company. It was a monopoly and there was nothing that would keep Mexicans from buying evermore phone services. And they did. I bought some shares and sold after a tiny gain. Had I kept the shares, I would have made enormous gains over decades.
The second can’t-lose idea came more recently, during the last big market crash, when it looked as if the United States might be heading toward a total financial meltdown. My idea at the time was to put 100% of my investment funds into Wells Fargo stock. The idea was that if the entire financial system collapses, it doesn’t matter where your money is because it will be worthless. But if the economy survived, I thought, the strongest bank of the bunch would come back fast and strong. On a risk-reward basis, this was as close as you can get to free money. I didn’t act on that idea, but it would have been a huge gain.
That brings us to Turkcell. In today’s connected world I have a hard time imagining a leading phone company in any country failing to grow no matter what else is going on around it.
Please don’t take my advice.
My new book is getting great reviews: