8 investment lessons from the recent Grammy Awards

One of the side effects of reading economic articles all day is you start to see financial lessons in random places such as the recent Grammy Awards. Oh well. My curse is your treat so here goes:

  •  Just because an album wins an award (or a fund receives praise from the press) doesn’t mean you’ll like it.
    • Here are the 34 distinct album categories that received awards this year. I listened to pieces of all of them and some of them resembled more noise to me than music let alone award winning music.
      • Pop Instrumental, Pop Vocal, Dance/Electronic, Traditional Pop Vocal, Rock, Alternative Music, Urban Contemporary, R&B, Rap, Country, New Age, Jazz Vocal, Jazz Instrumental, Large Jazz Ensemble, Latin Jazz, Gospel, Contemporary Christian Music, Latin Pop, Latin Rock, Regional Mexican Music, Tropical Latin, Americana, Bluegrass, Blues, Folk, Regional Roots, Reggae, World Music, Children’s, Spoken Word, Comedy, Music Theater, Historical, and lastly Surround Sound
      • How many of these categories do you have programmed into your car radio?
      • There are just as many, if not more, ways to invest your money (stocks, bonds, funds, indexes, etc.) but doesn’t mean they all fit your style.
  • Album sales have been steadily declining even though individual song sales are up.
    • In the past, if you wanted to own a song, you had to buy the entire CD (or LP if you’re of a certain age). Now you can just download the song or songs you like and skip the rest.
    • In the past, if you wanted to invest in stocks you had two options: individual stocks or traditional mutual funds. Now you have a variety of options such as: individual stocks, traditional mutual funds, index funds, closed-end funds, exchange traded funds, structured products, etc.
  • Sometimes the “sizzle” gets more attention than the “meat”.
    • In the financial media world the “sizzle” is the talking heads you see and hear on TV
    • In the Grammy world, the “sizzle” is the best and worst dressed magazines and TV shows.
  • Sometimes the most popular albums don’t win awards (and sometimes the most popular funds don’t make the most money)
    • According to the Associated Press, the top ten selling albums of 2012 were:
      • 21 by Adele, Red by Taylor Swift, Up all Night by One Direction, Take Me Home by One Direction, Babel by Mumford & Sons, Believe by Justin Bieber, Blown Away by Carie Underwood, Tailgates and Tanlines by Luke Bryon, Tuskagee by Lionel Richie and Night Train by Jason Aldean.
  • The best new artist recipient this year is really not a new artist at all.
    • The best new artist this year was the group FUN. During their acceptance speech they thanked the various people who believed in them while they’ve been on the road as professional musicians for the past 12 years.
    • Just because a mutual/hedge fund manager seems to be a new rising star doesn’t mean they just started investing yesterday.
  • When deciding if I like an album (mutual fund) or not, I don’t look at who produced it (what fund family it’s from) instead I just sit back and judge the music (i.e. risk and returns)
    • I own mutual funds from some well known and some not so well known fund families.
  • Just because an artist wasn’t nominated for a Grammy Award this year doesn’t mean audiences don’t appreciate their music.
    • Seven of the top ten highest grossing music tours for 2012 were from artists who were not nominated for Grammy Awards this year.
    • The boring approach of spending less than you make will never make the cover of financial magazines but that doesn’t mean it can’t work for you.
  • Winning an award this year doesn’t automatically you will win again next year.
    • I’m tired of the press providing one line biographies next to experts they’re quoting (he/she called the recent tech/stock/housing/etc. top/bottom correctly) without providing their readers with all the missed calls those experts also made.

 

How the earning, saving and spending of wealth affects various parts of our lives.

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