Why I Decided to Costanza My Investment Portfolio
Nearly everyone who came of age in the 1990s will likely remember the hapless Seinfeld character, George Costanza.
George was a 30-something fat, bald, unemployed, fake importer/exporter, with magnificent hands, who lived with his parents and spent many an afternoon treating his body like an amusement park.
George attributed his lack of success to one primary character flaw: bad instincts.
When it came to making a decision, George would consistently make the wrong one - even when it came to choosing something as simple as what to eat or what to wear.
One day George had an epiphany. If every instinct he had was wrong, then the opposite would have to be right.
It was in that moment that George pursued a life of opposite.
No sooner than when George ordered a chicken salad on rye with potato salad and tea - instead of his usual tuna salad on toast with coleslaw and coffee - did his entire life begin to turn around.
He got dates with women who were way out of his league.
He landed a bigtime job working for the NY Yankees.
And he even moved into his own place where he could go to town on himself without putting his mom in the hospital.
You are probably wondering what George Costanza’s new lease of life has to do with investment portfolios.
The answer is everything.
In fact, George’s opposite philosophy may not only be the solution to building wealth, but also to better health and greater happiness.
Now, I am in no way intimating that people do the opposite of their every instinct.
In fact, I am suggesting the very opposite of that.
Most individuals, save George Costanza, benefit by actually following their gut instincts. And being that our gut instincts are often at odds with what the government prescribes, I think it would be perfectly logical to explore the opposite of what is advocated by the government.
Particularly in recent years, the government has been devilishly wrong about nearly every issue most pertinent to the well-being of the people that it claims to serve.
Whether you chalk it up to poor judgment or something more nefarious, the fact is that government recommendations have been counter to our best interest - not to mention common sense.
The government’s recommended food pyramid proved to be detrimental to our health. Contrary to USDA advisement, individuals should have been eating a lot more meat and fats and a hell of a lot less bread and cereal. Although the profits of pharmaceutical and certain food companies would have suffered, we-the-people would have enjoyed a much better quality of life devoid of the multitude of chronic health conditions caused by the FDA-sanctioned ultra processed foods.
Sure, this “mishap” enriched a select number of S&P 500 companies. But it did so at the sacrifice of the blood and organs of a trusting populace.
The government’s mask guidelines turned out to be another “miscalculation.” Not only was masking - even double masking - ineffective in protecting against covid19, the masks ended up causing a host of avoidable health conditions such as rashes, styes and even developmental issues in young children - not to mention a proliferation of bacterial infections during a time when antibiotics were in short supply.
The government also “erred” in its gross underestimation of criminal activity. By assuring the public that the number of violent crimes was decreasing when, in fact, it was escalating, the government gave people a false sense of security. This “blunder” proved to be particularly hazardous to young females who mistakenly believed it would be safe to jog alone or be without self-defense products like pepper spray or keychain alarms. Lives could have been saved had individuals realized that they needed to be more vigilant.
The government also abysmally “misread” the economy. When inflation signals became glaringly evident in 2021, U.S. Treasury Secretary, Janet Yellen dismissed them, promising the public that the risk of inflation is '“small” and “manageable.”
In the three years since Yellen assured that inflation wouldn’t become a problem, it has soared to unprecedented levels and Americans lost over 20% of their purchasing power.
If the government hadn’t concealed inflation by suppressing key money supply metrics misperceived the warning signs, it could have mitigated mass economic hardship by tackling inflation when it first reared, and by informing the public on ways to prepare.
Manufacturers could have used forwards to lock in commodity prices which could have helped keep the cost of goods from rising so astronomically. Likewise, people could have braced themselves for looming inflation by stock-piling necessities, refinancing mortgages, postponing vacations and putting more money aside for a rainy day.
The truth is that government “lapses” have widespread repercussions that cause tremendous pain and suffering. They are also what led me to reach my own “Costanza moment.”
Falsus in uno, falsus in omnibus
There is a saying in Latin, “Falsus in uno, falsus in omnibus” which translates into, “false in one thing, false in everything.”
If the government can be this “misguided” about food, healthcare, crime and economics, I can’t help but wonder what else it is getting wrong.
I now find myself questioning the government’s judgment on everything - particularly its investment guidance.
The more the government cautions individuals against alternative investments such as private equity, private debt and cryptocurrencies as well as alternative retirement vehicles like self-directed IRAs, the more strongly I believe that these non-conventional financial products are the keys to financial independence and mass prosperity.
Until the government starts showing even a glimpse of judiciousness, I have decided to “costanza my portfolio” by avoiding investments that the government contends to be “safe”, like its Treasuries, and instead seek investment opportunities that are the very opposite.
