Investing lesson from my recent fishing trip; Existing home sales beat expectations; Two more fraud/scam tactics to watch out for

1) My first experience fishing was a miserable one...

My grandfather – a Seattle fireman, a union guy, an old-school man's man, and an avid fisherman – took me fishing when I was seven years old.

I remember catching a five-inch sunfish and the excitement of reeling it in. But when my grandfather was holding it and trying to remove the hook, which was really stuck, the fish was gasping for air and died.

I had never seen anything die, so I started crying... which led my grandfather to yell at me for being such a wimp – oh, the trauma!

Fast-forward 50 years, and I had a very different experience last week fishing in the Bahamas...

As we were trolling along with a bunch of lines in the water, the two professional fishing guides on the boat started screaming, "We got a monster!"

My friend Ross was lucky enough to be closest to them, so they strapped him into the "fighting chair" on the back deck and he began to reel in what they estimated was a 400-pound blue marlin.

After 20 minutes of massive effort, Ross was so gassed that the pros had to help him crank the reel – and then the line went slack.

Ross felt so bad letting the catch of the year (decade?) get away. But when we pulled the line in, we saw that the fish was so large and powerful and fought so hard that it had snapped the carbon steel hook in half to escape. Ross was off the hook (pun intended)!

We were all bummed about "the one that got away." But we certainly weren't going to give up – if anything, we were more determined than ever...

Sure enough, less than half an hour later, an equally rare and epic event occurred: we simultaneously hooked not one but two blue marlins! While they weren't as big – "only" 125 pounds each – it's extremely rare to hook two at the same time.

This time, my friend Kim and I had the honors. So we each grabbed a rod and, with him in the chair and me standing up with a waist belt, spent the better part of half an hour reeling in the very angry fish. It was exhausting!

Since I had never reeled in a big fish before, the pros on the boat were constantly giving me instructions. (Thank you, Gordy and Steven!)

The idea is to tire out the fish by always keeping the line moving: either the fish was running and pulling out the line (which was frustrating after all the effort to reel it in), or I was rhythmically lifting the rod up and then lowering it, pulling the fish as I raised it, and then cranking like a madman to take up slack as I lowered it.

My left arm soon became tired from moving the rod up and down, with all the weight of the fish on the line. Meanwhile, the same happened to my right arm from all the cranking (I feel you, Ross!). But I couldn't stop... because if I allowed any slack in the line, the hook might come out.

Eventually, with our hearts racing and sweat pouring into our eyes, Kim and I brought our fish alongside the boat at almost the same time.

And, best of all, we practice catch-and-release for blue marlin. So after getting a few pictures (see below), we let them go. No crying for me this time!

What a totally new, fun, wild experience! Here's a video of it, and below are a few pictures:

I wish I could think of an Ernest Hemingway metaphor to add here. But there is an investing lesson...

There will always be the "big ones that got away" – the stocks like Apple (AAPL), Home Depot (HD), Netflix (NLFX), McDonald's (MCD), Amazon (AMZN), etc., that you looked at and stupidly never bought (or, worse yet, in my case with all of these stocks, bought but then even more stupidly sold way too soon).

But you can't get discouraged and waste time beating yourself up for missing some monster stocks.

Instead, you need to get back in the fight.

Maybe you won't catch a 400-pounder... But I can tell you that it's very rewarding catching a 125-pounder!

2) The U.S. housing market has been frozen for more than a year.

New homes are the least affordable they've ever been based on their median price relative to median household income, as you can see in this chart from Charlie Bilello's latest Week in Charts:

And existing homes aren't selling because higher interest rates have led to two things:

• Buyers can't borrow as much. 

• But despite this, many sellers won't lower their asking prices (or even put their homes on the market) because they don't want to give up an extremely valuable asset: a long-term fixed-rate mortgage with an interest rate of only 3% to 4%.

So yesterday's report by the National Association of Realtors (Reuters has the story here: US existing home sales rise to one-year high in February) was a nice surprise...

Existing home sales jumped 9.5% last month to a seasonally adjusted annual rate of 4.38 million units – well above the 3.94 million units that economists were expecting, and the highest level in a year.

It's more evidence that the U.S. economy remains strong.

3) Continuing my many warnings about the incessant stream of fraudsters and scammers looking to bilk you out of your hard-earned money, here are two more to beware of...

The Wall Street Journal wrote about scammers on social media impersonating Bill Ackman, Cathie Wood, Peter Lynch, Ray Dalio, and Steve Cohen: Phony Billionaires on Facebook Are Scamming Americans Out of Their Life Savings. Excerpt:

Bill Ackman is fighting a losing battle against Bill Ackman. Impostors posing as the billionaire hedge-fund manager on Facebook keep luring hapless investors into stock-market scams – and the real Ackman has been powerless to stop them...

Ackman isn't the only titan of finance to meet his match on social media. Cathie Wood's ARK Investment Management has spotted thousands of ads that impersonate her. Fake versions of Peter Lynch of Fidelity Investments, Ray Dalio of Bridgewater Associates and hedge-fund manager Steve Cohen, owner of the New York Mets, peddled variations on the same scam in recent months.

The ads lure victims into joining WhatsApp groups to get stock tips from supposed associates of the big-name investors. In reality, they are just a new take on the classic pump-and-dump scheme. Small-time investors have collectively lost millions of dollars.

It's easy to get hoodwinked by the phony ads because they look real – here's one example:

A college buddy of mine, who also knows Bill well and has degrees from Harvard University and Harvard Business School, nevertheless was fooled by the ad and clicked on it.

Sure enough, he was directed to a WhatsApp chat room that was filled with people (no doubt part of the scam) boasting about how much money they had made from the host's stock tips.

Then, the host invited him to a private chat, where he shared the name and ticker symbol of the penny stock they were pumping (and would soon be dumping). Fortunately, my friend came to his senses in the nick of time and didn't invest...

And this New York Times article exposes another scam: How Fraudsters Break Into Social Security Accounts and Steal Benefits. Excerpt:

[This] particular fraud – where criminals use stolen personal information to break into online Social Security accounts or create new ones, and divert benefits elsewhere – has plagued people for more than a decade.

Once fraudsters gain access to an individual's online Social Security account, they can change a beneficiary's address and direct deposit information, or request replacement cards.

Nearly everyone is a potential target. The Social Security Administration sends checks to more than 70 million beneficiaries, including retirees and disabled people, totaling nearly $120 billion every month. An estimated 2,000 beneficiaries had their direct deposits redirected last year, according to anti-fraud officials at the Social Security Administration.

Be careful out there!

Best regards,

Whitney

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