With few exceptions, devotees of the business reality show Shark Tank almost always harbor a secret desire to sit side by side doing deals with the likes of Mark Cuban, Daymond John, Barbara Corcoran, and Kevin O'Leary (aka Mr. Wonderful). These guys make it look so easy; cherry picking the best of the best all the while lounging comfortably in a studio set made to resemble your typical living room.

What most of us fail to appreciate however, is the show's producers have already sifted through thousands of truly awful pitches before curating the 3 or 4 worthy of making their way into each episode. While the end result makes for compelling TV, the practiced observer sees there's also a bit of financial slight of hand that cleverly obscures a textbook case of survivor bias. That is, the tendency to overestimate the odds of investment success by drawing a circle around a pre-selected subset of the original data pool and then declaring whatever happens to fall inside the lines as the intended "bullseye".

We can’t help but contemplate unlikely events, both good and bad. When you buy a lottery ticket, you know you will almost certainly not win, but you enjoy the minute-long fantasy of what you would do if you did win. The Tigers could get something going this season and win the World Series, says a hopeful sports analyst on the radio. The medical website shows that your symptoms indicate seasonal allergies, but it could be the rare disease that killed a man last year. There are many books in the world of investing, but many of the bestsellers are about the huge losses that most people thought were impossible. We call these unlikely scenarios extreme tail events or black swans.

In June of 1812 and the height of French military power, Napoléon Bonaparte crossed the border at the Niemen River and launched an ill-fated invasion into Russia. Commanding an army of 680,000 French soldiers and conscripts, Napoléon by some estimates started with the largest and most powerful military force ever assembled. Ironically, at the start of his campaign Napoléon had no real intention of marching on Moscow. A few quick battles, near the border and it would be over. As every schoolchild now knows, things didn’t quite work out according to plan.

So how did the Tsar’s peasant army manage to neutralize a force whose power vastly exceeded its own? As the war stretched on, it turns out the Russians had two enormous structural advantages: the French supply lines became overstretched with each advancing step towards Moscow, and the bitter cold of the Russian winter turned lethal for a French army that was unprepared. The fatal flaw in Napoléon’s campaign strategy was not that he picked the wrong battles, it was he deployed his forces against one foe when in reality there were three.

When it comes to sustaining a successful investment planning campaign, the challenge of recognizing the threats hiding in plain sight are remarkably parallel to those that confronted Napoléon. Ultimately, every investor needs to understand there are three disguised threats to their financial security and devise a plan that confronts all three simultaneously.

<<Wired to Fail: How the Stock Market Conspires Against Us [Infographic]>>

Have you heard about the ivory tower academics who unilaterally made a huge decision affecting billions of dollars last year? To make matters worse, if investors fall into the trap of trading like automatons, this will trigger untold millions in taxable gains in the process!!! I presume you hadn't heard about this investment earthquake, but I bet I have your attention now.

We spend much of our time in our writings here discussing high level topics like the importance of financial plans, why working with a fiduciary is so valuable, and the traps of behavioral finance. Rightfully so, as these are the big decisions we need to get right to achieve our goals. Nonetheless, I expect most of our readers go a level deeper in their interest and keep track of the stock market (and maybe the bond market) over long periods of time, and we write on broad market behavior now and then to help articulate what we see in our research. Sometimes, though, the market watchers among us notice market movements like we experienced at the beginning of this month and wonder "why the heck did that happen?!" Completely answering that question is almost impossible, but I believe two things:

The informal birth of the financial planning profession took place nearly 50 years ago, when 13 businessmen gathered in a Chicago hotel room to discuss a better way to help people manage their financial lives. The idea behind the meeting was to make consulting, rather than salesmanship, the primary driver of the industry. This was a revolutionary idea at the time, as really the only “solution” available to investors were stock brokers or insurance agents who focused on commission producing transactions rather than unbiased advice.

Everyone is talking about bitcoin. Even this guy. The price movements have been staggering, and will likely continue. The underlying tech, blockchain, is both confusing and exciting (at least for those in the financial accounting world). While blockchain does have a real potential value to the world, there is an active debate regarding what bitcoin is, what it's worth, and whether you should own it.

It’s getting on towards late December and the shrink-wrapped tins of chocolate covered pretzels and canisters of gourmet popcorn that miraculously appear just before the winter solstice have been pretty well picked over in the company lunchroom. Deprived of the opportunity for mindless holiday nibbling, I'm starting to go just a bit stir crazy. 

Clearly, it’s time to spice things up. Since I'm temporarily unable to find anything more productive to do, it seems like a fabulous time to join the parade of econometric forecasters, market prognosticators, and other sundry financial charlatans to spew out my own half-baked vision of exactly how things are going to be in the coming year. Forget your stocks, bonds, mutual funds, CDs, or any other dusty old-school investment. In a never-ending quest to uncover the next big thing, what’s about to be revealed here is unfiltered money-making genius. Believe me, it’s going to be HUGE!