In finance, you cannot easily prove a model right by observation. Data are scarce and, more importantly, markets are arenas of action and reaction, dialectics of thesis, antithesis and synthesis. People learn from past mistakes and go on to make new ones. What is right in one regime is wrong in the next.
In finance you play against God’s creatures, agents who value assets based on their ephemeral opinions. Can you comprehend other pretenders’ uncertainty?–Mark Bradbury
Mark Tier, An “Austrian Investment Guru”
Mark Tier on Effective Investing, Where the World Is Headed and Why Financial Literacy Helps
Sunday, February 26, 2012 – with Anthony Wile
My lessons: Austrian economics is important for understanding reality but beware of being a macro-economist. Mark Tier filed as an investor but then learned from Soros and Buffett. If he can, you can too!
Mark Tier: I’m from Australia but in 1977 I moved to Hong Kong. I’m still based there, but I spend most of my time these days in the Philippines. In a sense I’ve been a nomad all my life. My father was in the army so we rarely spent more than three years in any one place. We ended up in Canberra − that’s Australia’s equivalent of Washington − where I went to high school and university.
I studied economics and political science at the Australian National University. In my final year of economics I discovered Ludwig von Mises (thanks to Ayn Rand). In what should have been my last exam I made a fundamental mistake: I argued from Mises’ perspective against the examiners. So I had to repeat that final year to get the degree.
Then, when I got out into the real world, I found that I had to unlearn pretty much everything I’d been taught. (I also had to struggle to unlearn nonsense economics from university).
My professors were all Keynesians; reality is Misesian.
Daily Bell: Bring us up to the present and how you began to focus on investing.
Mark Tier: I’ve always wanted to be a writer. When I was 14, I’d get up early and pound an ancient typewriter for a couple of hours before going to school.
After graduating, I started writing a book that was published as Understanding Inflation (and became an Australian bestseller in 1974). I put an ad in the back for an investment newsletter − and I’ve been “unemployable” ever since. When I moved to Hong Kong I renamed it World Money Analyst. In 1991 I sold it and “retired.” That lasted about three months. I was a partner in another newsletter business for a few years. Since 2000 or thereabouts, I’ve written three books and am now working on a couple of others.
Daily Bell: What’s your track record been like?
Mark Tier: Actually, until I figured out what became The Winning Investment Habits of Warren Buffett & George Soros, lousy.
Ironically, in the World Money Analyst I advised other people what they should do with their money. My own forays into the market usually ended with burnt fingers.
Once I applied (starting in 1998) what I call the 23 “winning investment habits” to my own investing, everything changed.
For the next six years my personal stock investments went up an average of 24.4% per year − compared to the S&P’s 2.3% − without a single losing year, compared to three for the S&P. A major, major transformation.
I can’t tell you my precise track record since then as I stopped keeping track of it. Put it this way: except for a dip in 2008, my net worth has gone up or remained stable. And that’s after paying the rent, putting food on the table, putting four kids through private schools and university, and indulging in vices like latest electronic gadgets and expensive cigars.
And when I get up in the morning, I have the luxury of choosing to do whatever I want to do with my day. Mostly, I write.
Entire interview here:http://www.thedailybell.com/3644/Anthony-Wile-Mark-Tier-on
Mark Tier’s web-site and books on investing:http://marktier.com/Main/index.php
Video lecture on smoking and property rights:http://www.youtube.com/watch?v=udlouHR4YcQ
Audio Interview: http://www.la.org.au/audio/221011/interview-mark-tier