Brendan Byrnes: Let's move back to individual investing. What do you think is one of the biggest mistakes that individual investors make, and how can they correct that?
Bruce Greenwald: You know what it is> In every society we know of, lotteries have always been successful, and mathematically they've always been crappy investments.
All investors are prone to love the idea of getting rich quick, and staying away from ugly things. I think when somebody tells you about a great stock that is going to quadruple, go take a cold shower and think very carefully about what you're getting for your money.
That's, historically, the biggest mistake, and you see it over and over again -- in the bubble in Japan in the late '80s, in the tech and technology bubble, in the housing bubble.
I think there's a huge bubble at the moment in government debt, where these things have performed really well, everybody's excited about them. Bond funds are collecting huge amounts of money, whereas stock funds are not, and looked at objectively, bond funds are not where the good returns are going to be.
I think it's going along with those herd instincts and the get-rich-quick categories, or individual stocks of the moment, that people have got to stop and say, "Not this time."
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