Broadcasting live to New York Bloomberg eleventh, Rio to Washington, d C. Bloomber to Boston, Bloomberg twelve hundred to San Francisco Bloomberg nine to the Country's Jam General one and around the globe the Bloomberg Radio Plus Athen Bloomberg got gone. This is taking stock. Coming up on taking stock, Sir John Templeton once said that there is only one long
term investment objective, maximum total returns after tax. We're gonna be speaking with Spencer Jacob and his new book heads I Win Tales, I Win, Why smart investors fail, and how to tilt the odds in your favor. That's all coming up next. Right now, Let's go to Charlie Pellett in the Bloomberg news room, and I thank you, pim Fox. We're looking at an update here for the DAL, the SMP, and NEZDAK, the Dow Industrials and SMP five hundred index
on track for records. This update is brought to you by National Realty for viders of one hundred percent satisfaction guaranteed New York City realty investments see them at n r i A. Dot net stocks are advancing quarterly numbers from Microsoft and Morgan Stanley, scurring optimism that corporate earnings can support further gains. We do have the SMP five hundred index up eight now two, a gain of four
tenths of one percent. Morgan Stanley shares her up by one point four percent, Microsoft rallying six point one percent, and Heuser Busch InBev has won US antitrust approval for its takeover of s A. B. Miller after the maker of Budweiser agreed to give up ownership of the Miller brand and open the door to greater competition from craft beers. Well, as we mentioned, Morgan Stanley posted profit that beat analysts estimates. Is revenue from wealth management and bond trading exceeded expectations.
Here's n y U Stern School of Business professor Brad Hints requartered and last quarter. But again, the d mbscent making cycle tends to be tied to GDP, so if you're if you don't have a booming economy, you're not going to get that. So they outlook remains let's keep the cost out. United Continental Holdings rising to its highest value in almost three months after chief executive officer Oscar Munio said he is reviewing all aspects of the airline's
operations in an effort to boost profitability. U a l is up by nine tenths of one percent. Gold down fifteen ounce the thirteen sixteen, the drop there of one point two percent, the tenure down eight thirty seconds of the yield of one point five eight percent. Recapping stocks higher, SMP up nine, a gain of four tenths of one percent two on Wall Street. Now look at other stories making news. Thank you, Charlie from the Bloomberg News Room.
I'm Jill Schneider. This news update is brought to you by the Jeep Grand Cherokee, the most awarded suv ever. The Grand Cherokee continues to raise the bar with its luxurious interior and legendary four by four capability. I wanted your local Jeep dealer today. Meredith mcgivor, a staff writer for the Trump Organization, is taking responsibility for passages from Milania Trump's Republican Convention speech resembling Michelle Obama's two thousand
eight Democratic Convention speech. McIvor posted a letter to Trump's campaign website. She says she offered her resignation to Donald Trump and his family, which they rejected. Cleveland Police Chief
Calvin Williams says he's pleased that's so far. Demonstrations during the first few days of the convention have been peaceful for us in the city of Cleveland right now, the last three days have been um pre even uh, not too much going on, and when things have sparked up, our officers law enforcement partners were there to take care of it. Donor countries are pledging another round of humanitarian aid to Iraq. The funds will help build the war
torn country and support displaced residents. Secretary of State John Kerry spoke at a meeting today with more than thirty other foreign ministers in Washington. I'm pleased to announce that by securing more than two billion dollars of pledges that we know will be forthcoming, we have exceeded our expectations. Kerry opened the event by saying Islamic state remains a threat. Beaches on Coney Island are open again today after a
possible shark sighting shut down beaches yesterday. The city Department of Parks and Recreation was investigating reports of both sharks and sting rays in the water. Global News twenty four hours a day, powered by more than journalists and analysts in more than one d twenty countries. I'm Jil Schneider. This is Bloomberg, Charlie, and we thank you and again recapping stocks higher with the SMP five hundred index up nine points to seventy three, a gain of four tenths
of one percent. I'm Charlie Pellett, and that's a Bloomberg business flash. You're listening to taking Stock with pim Box and Jatholne Hayes on Bloomberg Radio. If you buy the same securities as other people, you will have the same results as other people. It's impossible to produce a superior performance unless you do something different. I'm the majority, so says Sir John Templeton. One of the world's most famous
and successful investors. Here to tell us more about how to tilt the odds in your favor is Spencer Jacob. He is the author of a new book entitled Heads I Win, Tales I Win, Why smart investors Fail and how to tilt the odds in your favor. Spencer Jacob, thanks for being with us. First question, why did you write this book? Well, the reason I wrote the book. I mean, I've got nearly a quarter century under my belt. Now, I was a top rated stock analyst that I became
an investing columnist. And you know, in my line of work, you get asked all the time, what do you think I should buy? What do you think about Apple gold, or you know, go back fifteen years, what do you think about Cisco or pets dot Com? And you know that my advice, you know, has been I really don't know. I mean, despite the fact that I'm paid to to do this, there really is no one who can reliably tell you what to buy or what to sell tomorrow. What I can tell you, though, is that your results
are much worse than you wise. And people are really shocked when I tell them the numbers um that I m in my book. It's it's based. It's absolutely true. Though the average investor is way below the market averages. Uh. And it's it's quite easy to narrow the gap, or quite simple, I should say, but not easy. All right. So right now, looking at the SMP five year to date,
the return is about six point three. If you're lagging that six point three in your portfolio, what are some of the ideas that you recommend well, if you're lagging this year, UM, and you're adopting some principles. Let's say you're not invested in the things that happened to be doing well this year, but you're a passive investor, you're not buying crazy names, then you have absolutely nothing to
worry about. As a matter of fact, I think that the act of worrying about only making two percent with the markets of six is exactly the sort of attitude that gets people into trouble because you're always chasing performance, You're always looking for a fund manager who has the magic touch. You're jumping from person to person, stock to stock, sector to sector, and that makes you a typical investor and a typical investor. UM. Let's say you know you
you compare to people. Let's say PIM, you and I both inherited a bunch of money thirty years ago, and uh, I was a typical investor and you were a completely robotic passive investor. Uh. After that period of thirty years, given the same amount of money and not allowed to touch it, you would have five to seven times as much money as I I would And that's a reflection of all the mistakes that people make that compounded over
that very long period of time. So I would say, um, you know, be passive, be a robotic, be cheap, uh, don't pay too much for uh, you know, for a pool of passive investments, you really can't do much better. And if you're tracking the market or something close to it, you're doing better than eight or nine out of ten investors, which is pretty good. So people don't want to except that, you know, they can only sort of track the market
or come close to it. But it's you know, and people are not aware of this, but it's far far better than what most people do. Professional money managers are professional money managers any better at selecting investments to produce the kinds of returns that their customers want than the customers themselves. No, I think that people who have heard statistics on it actually assume that they must be worse. Because you hear that in any given year, sevent of
fund managers will will lack the market. At any given decade, over will lack the market. It isn't because they're bad. They're actually, you know, maybe slightly better than than you are at picking stocks. But when you tack their costs onto it, all the costs of managing money, the cost of holding some cash, the cost of their their um you know, paying them, and the profits of their companies. That's when the lag comes in. So professional money managers
are not bad investors. They're probably slightly good investors compared to the man on the street. But once you once you pay them, the return is not too good. And people, you know, it's it's surprising that that people will read these reports and they'll read interviews with them. And I know lots of money managers. I'm friends with many, and they'll see someone who's rated four or five stars and put money into their fund and take it out of
someone who's been lagging recently and statistically. Although I don't recommend putting money with any active manager. Uh, that's actually the worst thing you can do. Uh. It's it's like the Sports Illustrated cover curse the guy who was on the cover of a magazine because he's really hot. Bill Miller when he was on his fifteen year streak is
likely to revert the mean and do poorly afterwards. As people found out the hard way with Bill Miller after the fifteen years streak ended, he was one of the worst managers for a few years. What do you think of the words of Charlie Munger. He says that the academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Well, um, I think that you don't put all of your eggs in one basket.
I think and if you're a Charlie Munger or you're Warren Buffett, uh, and you have fifteen or twenty stocks, and you're extremely patient like them, Uh, then you can do quite well. You don't need to have five or a thousand stocks. I think he's right about that. Would Warren Bufetts say, you know, just you know, I don't disagree with putting all your eggs in one basket. You
just need to really watch the basket. But what Charlie Munger and Warren Buffett and a handful of people have that most people don't have his patients For example, why I point out techniques in my book that will actually gain you an edge over the market, but people lack the patients to adopt those techniques unfortunately. Well, I want to thank you very much for shedding some light on this. Spencer Jacob is the author of the new book heads I Win, Tails, I Win, Why smart investors fail, and
how to tilt the odds in your favor. I'm Pim Fox and this is Bloomberg, coming up on taking stock, metals, mining, and commodities. We've got Gordon Johnson, the head of Alternative Energy and a director of Axiom Capital Management. That's next.