Are You Reading the Right Finance Content?
Why the only financial advice worth following comes from those with skin in the game...
Here's a disturbing thought: Most investment advice comes from people who don't follow it themselves.
Think about that for a moment.
The financial world is filled with recommendations from advisors, analysts, and newsletter writers who rarely disclose what they actually own.
Why should you trust someone's stock picks if they don't trust them enough to invest their own money?
I've been thinking about this quite a lot lately.
In a market where everyone's selling certainty, very few are backing their confidence with their own capital.
Talk is cheap. Capital at risk isn't.
Just look around.
Financial media is filled with emphatic recommendations from people who never disclose their personal holdings.
Investment newsletters boldly proclaim "top picks" without revealing whether their authors own a single share.
And when pressed? The typical response is evasive at best:
"My personal situation is different..." "I maintain a diverse portfolio..." "Regulatory considerations prevent me from saying..."
Translation: "I don't own what I'm telling you to buy."
This should be a red flag.
This wasn't just about one newsletter or analyst.
It's about a fundamental principle that's routinely violated across the investment landscape: skin in the game.
As Nassim Taleb puts it:
"Don't tell me what you think. Tell me what you have in your portfolio."
The Asymmetry of Advice
The problem runs deeper than you might think.
Modern finance has created a dangerous separation between advice and accountability.
Newsletter writers recommend stocks they don't own.
Analysts issue "buy" ratings without purchasing a single share.
TV pundits make bold predictions with zero personal exposure.
The system rewards confident predictions, not correct ones:
They give the advice
You take the risk
They collect subscription fees regardless of results
Would you take cooking lessons from someone who never eats their own food?
Of course not.
Yet most of us follow financial guidance from people who wouldn't—and don't—invest alongside us.
The Intelligence of Aligned Interests
What's fascinating is how having skin in the game fundamentally changes the quality of advice.
When someone's money is on the line alongside yours, they:
Research more thoroughly before recommending
Consider downside scenarios more carefully
Focus on long-term outcomes, not short-term hype
Resist making emotional calls
Can't afford to fool themselves—or you
Charlie Munger captured this perfectly:
"Show me the incentive and I will show you the outcome."
When a person's financial interests align with yours, their advice transforms. They become more cautious with recommendations, more thoughtful with analysis, and more honest about prospects.
In other words, they start thinking like fellow investors, not salespeople.
Finding Advisors With Real Conviction
So how do we apply this principle practically?
First, ask the right questions before following any investment advice:
Does the person recommending this stock own it themselves?
Have they disclosed their complete position size and entry price?
Do they report their exits as promptly as their entries?
Do they share their failures as openly as their successes?
Second, restructure your approach to investment information:
Only follow guidance from sources transparent about their own investments.
When someone recommends without disclosure, you're essentially receiving advice from someone operating without accountability—they've disconnected recommendations from personal consequences.
Warren Buffett made this clear in his 1993 letter:
"We will only do with your money what we would do with our own."
This principle explains why Berkshire has outperformed for decades. While others recommend investments they wouldn't touch themselves, Buffett and his managers invest alongside shareholders because they are shareholders.
The Ultimate Credibility Test
Here's what's remarkable: skin in the game isn't just ethically superior—it's a powerful filter for investment advice.
Studies consistently show that funds where managers invest significantly alongside clients outperform their peers.
Financial guidance from advisors who disclose their personal holdings carries more weight.
Newsletters that report on the author's actual portfolio tend to provide more measured, realistic recommendations.
Applying This to Your Information Diet
Take a moment and examine your investment information sources through this lens:
Disclosure transparency: Do the newsletters and advisors you follow clearly disclose their personal positions in recommended investments?
Balanced reporting: Do they report poor performers as prominently as winners?
Personal responsibility: Are you demanding accountability from those whose advice you follow?
If you're uncomfortable with any of these answers, something needs to change.
The beauty of skin in the game is its simplicity. It doesn't require complex models or advanced degrees.
It simply requires that those who give advice share in the consequences—both good and bad.
In a world of increasingly sophisticated investment "expertise," this ancient wisdom cuts through the noise.
The Bottom Line
Investment success isn't about finding advice from the loudest or most credentialed voices.
It's about aligning yourself with people who:
Have their capital at risk alongside yours
Feel the pain of poor recommendations as acutely as you do
Give advice with the care that comes only from personal exposure
As Howard Marks noted:
"Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ... Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble."
And nothing creates better temperament than having skin in the game.
Our Commitment
Unlike most newsletters and investment services, we actually show our members exactly what we own.
For paid members only: Each month, we publish our complete portfolio holdings, recent transactions, and the exact percentage of our personal wealth invested in each position.
No hiding. No selective reporting. Complete transparency.
🔥 Special Launch Discount:
To celebrate the launch of Schwar Capital, we wanted to give you an exclusive limited time offer!
20% lifetime discount on the annual plan
Complimentary access to Schwar's Radar included at no extra cost
This special promotion ends soon! Secure your premium membership today to lock in these benefits.
Because if we're not willing to eat our own cooking, why should you trust our recipe?
Until next week,
Dom
Founder & Chief Investment Officer
Schwar Capital
Question: What's your litmus test for trusting financial advice? Do you only follow advisors who disclose their own holdings, or do you have other methods for filtering signal from noise? I read and respond to every comment - your insights help shape future newsletters! 💡
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Disclaimer: The content provided in this newsletter is for informational purposes only and does not constitute financial, investment, or other professional advice. The opinions expressed here are those of the author and do not necessarily reflect the views of Schwar Capital. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The author may or may not hold positions in the stocks or other financial instruments mentioned. Always do your own research or consult with a qualified financial advisor before making any investment decisions.