My father told me, “money grows legs and walks away on you.” He had done some modest investing in the stock market after the war but bailed out at the bottom of the market towards the end of the decade, when I was born. Just know that everything to do with money is full of deception. When I started my own career, my mentors said, “you can’t become rich working with your hands; make your savings work for you”. As I progressed, a continuing education lecturer said, “in the market, you never know whether your next move is the smartest or the stupidest; it is always one or the other”.
The problem with retail investing (without inside knowledge of the business) is lack of accurate information; if it were accurate, you wouldn’t have to contend with “stupid moves” (tending toward self-destruction). But every investor makes errors, and if you don’t examine why you lost money you will be condemned to repeat the mistake, because when conducting learning by trial and error (which is all learning), the education lies in the error, not the success. When you repeat the error, you will know it and gnash your teeth for your incompetence; when you succeed at investing, you attribute that to how smart you are and become vain and arrogant. Therefore in investing, as in all things, it is better to be humble and grateful for your loss, which is the fee for your lesson. In investing, like learning arithmetic, no one can teach it to you. You must teach it to yourself.
Chuck, I appreciate your comment. Readers can find this comment as a new independent post on Chuck's Substack, linked at the top of his comment.
Since I have a limited amount of time and many activities to accomplish, I choose to match the market, not beat it. My studies show that by doing so, I can increase return and decrease risk - up to a point, of course. The remaining issue of concern to me is asset allocation, which is what I study the most.
I do have some "active" picks, which are not individual stocks, but rather ETFs, that I think will either outperform the market, or are less vulnerable to an economic downturn.
What Goes Up, Must Come Down
My father told me, “money grows legs and walks away on you.” He had done some modest investing in the stock market after the war but bailed out at the bottom of the market towards the end of the decade, when I was born. Just know that everything to do with money is full of deception. When I started my own career, my mentors said, “you can’t become rich working with your hands; make your savings work for you”. As I progressed, a continuing education lecturer said, “in the market, you never know whether your next move is the smartest or the stupidest; it is always one or the other”.
The problem with retail investing (without inside knowledge of the business) is lack of accurate information; if it were accurate, you wouldn’t have to contend with “stupid moves” (tending toward self-destruction). But every investor makes errors, and if you don’t examine why you lost money you will be condemned to repeat the mistake, because when conducting learning by trial and error (which is all learning), the education lies in the error, not the success. When you repeat the error, you will know it and gnash your teeth for your incompetence; when you succeed at investing, you attribute that to how smart you are and become vain and arrogant. Therefore in investing, as in all things, it is better to be humble and grateful for your loss, which is the fee for your lesson. In investing, like learning arithmetic, no one can teach it to you. You must teach it to yourself.
Chuck, I appreciate your comment. Readers can find this comment as a new independent post on Chuck's Substack, linked at the top of his comment.
Since I have a limited amount of time and many activities to accomplish, I choose to match the market, not beat it. My studies show that by doing so, I can increase return and decrease risk - up to a point, of course. The remaining issue of concern to me is asset allocation, which is what I study the most.
I do have some "active" picks, which are not individual stocks, but rather ETFs, that I think will either outperform the market, or are less vulnerable to an economic downturn.