Wall Street Star Josh Brown Reveals Investing Secrets in New Book, Says Reuters

By Chris Taylor

NEW YORK – If you’ve kept an eye on financial markets over the past 15 years, you’ve likely heard of "Downtown" Josh Brown.

The author of The Reformed Broker, one of the most popular financial blogs worldwide, has amassed millions of followers thanks to his candid approach that shines a light on the inner workings of Wall Street.

His new book, "You Weren’t Supposed To See That: Secrets Every Investor Should Know," compiles insights from the past years while offering fresh perspectives through the lens of 2024.

"I wanted to put a cap on the entire ‘Reformed Broker’ era," Brown explains. "Let’s extract the more timeless ideas from those 15 years, examine what has changed, and see what investors can learn."

This task is challenging as Brown not only enjoys revealing Wall Street’s hidden flaws but also manages billions of dollars as CEO of Ritholtz Wealth Management and appears on CNBC’s popular "Halftime Report."

Here, he shares three ways to safeguard your financial interests and avoid pitfalls:

1. Pay Attention to How Your Adviser is Compensated

"If someone is paid upfront for selling you something expensive, it’s highly likely the outcome will be poor," he advises. "The sooner you can distance yourself from someone charging a high fee for a transactional service, the better off you’ll be."

The reason is clear: if a financial salesperson earns, say, 10% on a deal, it’s likely because they know that it’s the last time you’ll engage with them. Conversely, when an adviser directs you towards low-fee investments like exchange-traded funds, they’re typically aiming for a long-term relationship with potentially better results.

2. Don’t Get Mesmerized by One-Hit Wonders

Just because a well-known investor makes a successful trade doesn’t guarantee that they’ll continue to be correct about future opportunities.

"There’s a tendency to idolize investors who make a good call or accurately predict a bull or bear market," Brown notes. "However, examining what happens afterward is very insightful. The history of Wall Street is filled with one-hit wonders."

Financial media often elevates certain fund managers to boost ratings, but the belief that an investor who is right once will always be right is a significant misconception among individual investors.

3. Just Own the Robots

One of Brown’s most well-received blog posts from 2017 highlighted the rise of artificial intelligence and the anxiety surrounding its impact on employment. While it’s true that many jobs could be affected, investors have a proactive option: invest in the companies driving the AI revolution.

For instance, if you had invested in Nvidia in 2017, you might not be as worried about job security today.

"It was incredibly insightful, and those ideas have gained even more relevance over time," Brown reflects. "Instead of resisting, embrace the change. You might as well have a financial interest in the companies that could affect your career."

Looking ahead, Brown is considering branching into historical fiction to recount some of the more outrageous tales from Wall Street’s past.

Regarding his current book, Brown emphasizes that readers shouldn’t expect a typical how-to guide.

"I wrote the book to connect personally with readers, making investment concepts resonate emotionally," he explains. "My goal was to humanize these complex ideas, and if the book succeeds, that will be the reason."