By Chris Taylor
NEW YORK – If you followed the financial markets at all in the last 15 years, you likely know “Downtown” Josh Brown.
The author of The Reformed Broker, one of the most-read financial blogs in the world, gained millions of followers for his bracing style that pulled the curtains back on Wall Street.
Now his new book, “You Weren’t Supposed To See That: Secrets Every Investor Should Know,” rounds up insights from those years and provides fresh commentary through a 2024 lens.
“What I wanted to do was to put a capper on the whole ‘Reformed Broker’ era,” says Brown, who now shares his investment thoughts at . “Let’s take the more evergreen ideas from those 15 years, see what has changed, and what investors can learn.”
It is a tricky balancing act, since Brown not only relishes exposing Wall Street’s underbelly, but also helps steer billions of dollars as CEO of Ritholtz Wealth Management and as star of CNBC’s popular “Halftime Report.”
Here he shares three ways to protect your financial interests and not get eaten by sharks:
PAY ATTENTION TO HOW YOUR ADVISER IS PAID
“If someone is paid up-front for selling you something expensive, it’s highly likely the outcome will be a poor one,” he says. “The faster you can get away from someone who is charging you a lot for a product on a transactional basis, the better off you will be.”
The reason: If a financial salesperson is getting, say, 10% on a deal, the reason is that person “knows it is the last time you will ever work with them,” Brown says.
Whereas when an adviser steers you into investments with extremely modest fees like exchange-traded funds, they are more likely looking to build longer-term relationships with better outcomes.
DO NOT GET MESMERIZED BY ONE-HIT WONDERS
If a prominent investor makes a great trade, does that mean he or she will be correct about other things too? Absolutely not.
“There tends to be a deification of investors who made a good call, or were right about a bull or bear market,” Brown says. “But looking at what happens afterwards is very instructive. The history of Wall Street is littered with examples of one-hit wonders.”
It may be the nature of financial media to promote superstar fund managers to help drive ratings. But the notion that an investor who is right about one thing will be right forever, is the “one thing that individual investors get wrong consistently,” he says.
JUST OWN THE DAMN ROBOTS
One of Brown’s most popular all-time posts was back in 2017 – and if you had listened to his advice at the time, you would be very rich indeed.
He ruminated on the advent of artificial intelligence and people’s angst that it is coming for our jobs. The cold reality is that may indeed be true for many. But investors do have agency here: You can buy stock in the companies and technologies related to the artificial intelligence industry.
If you bought a bunch of Nvidia in 2017, for example – well, you would not have to worry quite so much about your salaried job.
“It was remarkably prescient, and those ideas have only become more resonant in the years since,” Brown says. “If you can’t beat them, join them. You might as well have a stake in the companies trying to eliminate your own usefulness.”
Next up for Brown: Perhaps a stab at historical fiction, an idea he has harbored for a while, to bring to life some of the wilder stories from the history of Wall Street.
As for the current book, Brown says investors should not expect the dry approach of how-to manuals.
“I wrote the book in such a way to connect with readers personally, to take investment ideas and make people feel the emotions behind them,” he says. “I tried to take all these complex things and humanize them – and if the book is successful, that’s the reason why.”
(Editing by Lauren Young and Jamie Freed)
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