By DAVID MOON, Moon Capital Management
I often think of a recurring scene
from that long-running, high-brow, intellectual comedy show, Hee-Haw. In the
scene, a buxom Hee-Haw honey would visit her country physician, played by Bulls
Gap, Tennessee native Archie Campbell.
'Doctor, it hurts when I do this,' she would complain, as she twisted her
arm around her head and tucked her wrist underneath her chin. Each week, the
doctor's advice was consistent: 'Well honey, don't do that,
The good doctor may have
known how to make her arm stop hurting, but it would have been a lot more
helpful if he (or she) could have figured out why she kept contorting herself
like that each week. Stopping the contortion was merely treating her
This girl had some deep
problem that caused her to keep acting like a pretzel.
I thought about this
while reading one of the latest 'just pay off all your debts and your financial
life will improve' books. For some people, this simple yet often difficult
advice is the critical step in improving their economic lot. But for many
others, merely paying off credit cards or following a strict set of budgetary
rules doesn't address the core reasons that first put them in a tough spot.
Their problem is much
is, for many people, a coping mechanism for anxiety. Some people use food or
pain pills. For others it is exercise or meditation. And some people go to the
If you stop the spending or borrowing without understanding why you are
inclined to act like that, you are not addressing the problem; you are simply
dealing with the current consequences.
You are likely to
displace the behavior in some other compulsive conduct. You might start
contorting your arm around your head and under your
Rabbi Edwin H. Friedman,
a noted psychologist, observed that except in immediate emergencies, treating
compulsions is a waste of time and resources. Therapy turned a generation of
smokers into former-smoking overeaters. Former addicts of illicit drugs became
And through the
suggestion of how-to books, we're turning shopaholics into addicts of other
types. They may be financially solvent, but if they haven't addressed the reason
for their behavior they're really no better off.
Yet books advising
people that there are a few simple steps that can change their lives sell
Because people prefer
simple answers ' answers that don't require thinking or analysis.
Look at the magazine
covers that always seem to be on the shelves: 'Five stocks for 2006!'; 'How to
double your money now!'; 'Lose weight on the grapefruit diet!' I never see
'Hours of reading and analysis lead to great stock pick!' or 'Man loses 25
pounds after three years of working out!'
We want someone to give
us a set of rules to solve our problems. Yet most sets of rules address only our
In this regard, as well as most others, money and investing are just like other
areas of our lives.
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).