Weekend Reading – A history lesson in getting it wrong
Hi Everyone!
Welcome to some new Weekend Reading material: sharing a short history lesson in getting it wrong.
Before more details on that and what I mean, some recent reads on my site…
Last weekend, I shared my answer to this question below:
And…this past week, I updated this post about the very first dividend paying stock I purchased approaching 20 years ago…
Weekend Reading – A history lesson in getting it wrong
Let’s jump right in!
Some investors have benefited from the content shared by Rich Dad, Poor Dad author Robert Kiyosaki.
I am not one of them.
His book highlights how he believes wealth is really built: by owning real estate, taking on signficant leverage, and owning other assets including alternative assets in the process.
Kiyosaki has been quoted about owning some $1.2 billion in debt recently.
He says he likes debt and remains in debt because: “if I go bust, the bank goes bust. Not my problem.”
Recently, I noticed this latest prediction from him on X:
I thought it would be interesting for this Weekend Reading edition to share a brief history lesson in getting it wrong.
Robert Kiyosaki claims/tweets/quotes:
April 7, 2011 (tweet): “For the educated, an economic crash is the best time to get rich. Guess what? The crashing is not over.”
Yes, always a good time to buy Robert but saying this does not make you an expert: S&P 500 gained about 2% that year.
Sept. 1, 2015 (tweet): “I’ve been predicting since ’02 that we would see a stock market crash in ’16.”
Fact: S&P 500 gained just over 1% that year.
July 30, 2017 (tweet): “Another sign a real estate crash is coming…..”
Sure, maybe?: S&P 500 investors gained almost 22% that year.
Aug. 7, 2018 (article): “Unfortunately we had a big crash in 2000, they called it the dotcom crash, then in 2008 it was the subprime real estate crash. The next is going to be the biggest of all. When it’s coming I don’t really know, but the foreshocks are sounding right now.”
Fact, you can’t know: S&P 500 investors only lost about 4% that year.
April 17, 2020 (tweet): “CRASH ONLY BEGINNING: Buffet says ‘When tide goes out you see who’s been swimming NAKED.’ Billions of naked swimmers. SAD.”
Oct. 28, 2020 (tweet): “The EVERYTHING CRASH is coming. Since 1987 world has been in EVERYTHING BUBBLE. Now all crashing. Prices of gold silver Bitcoin will crash too. US dollar to rise. Be patient.”
Fact, wrong again: S&P 500 gained around 18% that year.
Sept. 26, 2021 (tweet): “Giant stock market crash coming October. Why? Treasury and Fed short of T-bills. Gold, silver, Bitcoin may crash too.”
Fact, see a pattern (??): S&P 500 gained over 25% that year.
July 17, 2023 (tweet): “I do not play the stock or bond markets. As an entrepreneur I like my hands on control too much. Yet too many signs point to a severe stock market crash.”
Dec. 10, 2023 (tweet): “Get some cash out of banks as you need cash. This may be the start of the biggest crash in history.”
Reality, too bad he doesn’t invest in the U.S. stock market: S&P 500 gained over 25% that year.
May 2, 2024 (tweet): “BAD NEWS: CRASH has BEGUN. It will be a bad one.”
Fact: S&P 500 gained close to 25% last year.
Sources:
- https://money.usnews.com/investing/articles/robert-kiyosaki-track-record-stock-market-crashes
- https://www.slickcharts.com
- www.visualcapitalist.com/sp-500-annual-returns-since-1874
Predictions can be fun. Good entertainment. Just don’t follow them.
…relying on any expert information or following any social media advice for your personal finance decision-making needs could be disastrous to your financial health.
Source: https://www.reddit.com/r/AusFinance/comments/t6aegc/robert_kiyosakis_investment_advice/
More Weekend Reading – Beyond a history lesson in getting it wrong
I enjoy Ben Carlson’s balanced takes. He recently wrote about having too much safety in your portfolio.
Here is another fine example of ignoring some online content – or at least treating it as entertainment.
Which one is it?
OR
Source: Seeking Alpha, January 2025.
For the record, unlike Seeking Alpha, I believe when you want to ignore any stock selections owning low-cost, diversified global funds can be great ways to invest including firing your expensive money manager too. Using a 0.75% assets under management model – that would cost me/us tens of thousands of dollars per year for someone else to manage our money. Stuff I think about… 🙂
My friend (Dividend Growth Investor) reminded us as much as U.S. stocks have soared in recent years, bad market cycles can and do happen. 2025 is just starting out – it could be a wild ride. You never know.
“The S&P 500 was flat between 2000 – 2012, before going up 5x in the past 12 years If you are not able to stick to the investments when they are going nowhere, you’d not be around to benefit from them when they are going somewhere…”
Stay invested. Have a great weekend!
Mark
I’m ignoring the financial news and “and sticking to my investment plan. Our spending plan has switched to near 100% Canadian products, services, and stores; even cancelled Netflix, AppleTV, and Prime. I estimate $20,000 to $30,000 of our 2025 spending will be redirected from American-owned stores to Canadian-owned stores. Perhaps I’ll see a boost in my dividend income!
Good stuff. We buy local and Canadian where we can and that is certainly going to move higher in the coming years.
We will also be looking at changing our long-term travel plans by avoiding the U.S. where we can.
Mark
Thanks for the great articles. I left TD and over 2.0 MER to low MER ETFs and have never looked back.
Outstanding Barbara = DIY for the win.
Mark
Always loved this … “The only function of economic forecasting is to make astrology look respectable.” John Kenneth Galbraith
Very good stuff, Barry. Totally how I feel!
Mark
Ah yes – good ol’ Kiyosaki and his “predictions”. Whenever I see these types of quotes, the same words pop into my head: “snake oil salesman”. 😉 As for this latest “advice” about bitcoin, people can do what they want but I, for one, have always avoided it and will continue to avoid it. I’ve never quite understood bitcoin – but the more I try to, the more it just seems so “fabricated” and can just change on a whim. Give me solid dividend-paying companies any day – now THAT I can understand!
If DJT is now hawking it there is surely something not right about it.
RICARDO
Pretty much. Americans love this con man for some reason.
Mark
I hear ya. 🙂
Buying anything lately?
Mark
As I mentioned somewhere previously I started building cash several months ago in anticipation of DJT with my portfolio(s) cash position close to 10%. Never been that high before as I was just about 100% equities.
Personal opinion is that the market has not had a downturn yet.
I’ll just sit by for a while. Right now “Cash is King”
You don’t know where this is going, when nor for how long.
RICARDO
I would agree, market could go down in 2025 overall. We’ll see!?
Mark
Curious where your parking the cash?
I’ve been using EQB 30 and 10 day Notice accounts but noticed that the difference now between the 30 day at 3.05% and 10 day at 3% is no longer enough for me to choose the 30 day. Moving the funds to the 10 day account but wondering there are better opportunities out there for parking cash and earning some interest?
Ya, those near-term account promotions seem decent. Likely another 25 bpd rate cut this spring. We shall see!
Mark
Built up some cash and will look to add to existing holdings (eg. XAW, XIU). But I have to admit – this whole tariff thing has me a bit spooked so I’m just going to lay low and see what plays out over the next month or so.
Ya, big fan of XAW and XIU – even though I don’t own the latter re: built my own Canadian index.
I will probably still keep adding to XAW later this year if I have the $$ to do so.
Mark
Hi Mark,
Thanks for the chuckles… P.S.- A crash is coming. I don’t know exactly when or why. When it comes I’ll post on line that I told you so… lol.
Yes, he (Kiyosaki) is quite the guy. I guess that’s what some people do in the U.S. to become wealthy. Just publish * ahem * garbage.
Sigh.
Mark
So how does the K-conman make money promoting this nonsense. He has been called out so many times for his false predictions and yet continues to send them out. This means to me that he must make some money doing it. Yes?
Yes, I assume he profits off it. Otherwise, why bother?
I would never personally follow his advice but I know others that do.
To each their own. Count me out. 🙂
Have a great weekend Dave!
Mark