In the U.S., the term has come to be used by both the Right and Left to describe political opponents, with Stephen Perrault of the Merriam-Webster dictionary suggesting that the term has “connotations of idleness, of useless talk, that the noun ‘chatter’ does. … These people don’t amount to much—they like to hear themselves talk.”
—“Chattering Classes,” Wikipedia.
7. Avoid the Noise: Reduce your consumption of useless chatter, be it print or on TV. Classic investing books are vastly superior to ephemeral market gossip.
—Barry Ritholtz, “Keep Investing Simple,” The Big Picture, January 2013.
Useless chatter! Moi?
If you do even three of Mr. Ritholtz”s 10 tips, you and your portfolio will be better for it.
The only one I quibble with is “rebalance” often. I am skeptical that selling winners is a good use of time. Maybe sell over a certain threshold, or let the abundant winner alone and add capital somewhere else.
And then there is Item 7.
Ritholtz clearly takes a vicious swipe at the likes of Sara Eisen, Scarlet Fu, and me. The trick is his use of the word “classic,” as in classic books.
In this, he is dead on. You would be stunned at how thin the reading is of most gurus, and equally stunned at the reading requirement necessary to earn perspective and pundit cred.
(Memo: Don’t equate performance excitement with useless chatter. Some of the most perfectly proper Brooks-Brothers-draped elite can be dumb as wood.)
Here are three books to help you avoid ephemeral market gossip and rise above the noise.
Richard Bernstein, Style Investing. A serious and grown-up effort by Merrill’s legendary ace. Once part of the CFA curriculum, it is dense, rich, and rewarding.
Benjamin Graham and David Dodd, with Warren Buffett, Security Analysis. Many own it; few read it. Read it. Dated, but required. Get over it. It is a right of passage.
Sheldon Natenberg, Option Volatility & Pricing. Next time some yahoo says “gamma” on TV, hold on to your wallet. Better yet, read (slog through) the option bible. Classic on the Greeks.
I’m sure Barry has 14 other classic books, some easier, some more challenging. The point is, you need to get smarter to fight off the chattering class. Discuss.