As investors, it is important for us all to ask what is it that we are doing. Hw is our doing adding value to our long-run (career) returns.
Recently, I have taken over the control of the light switches in my house. At the age of 32, I can honestly say that this is the first time in my house-living experience (i.e. ex-the few apartments I have lived in) that I have owned this responsibility. What discovery did I immediately find? I had absolutely no idea whatsoever which switch (and it seems like there are hundreds of them) corresponds with which light. Alas, after a week of very scientific method like trial and error, I am confident that I have the situation well in hand; I have mastered not only the switch-light relationships but also have developed a satisfactory system of which lights belong on at what time. I am oozing with self-satisfaction as I’m sure you can tell. But what on earth does this mundane, wee accomplishment have to do with better investing? Hopefully, the following paragraphs will shed some light.
For thirty or so years, I did not do lights. First, there was my mother and then there was my spouse. As a consequence of not doing lights, I did not know them nor how to do them. Only when faced with living in utter darkness was I spurred into action. I learned out of necessity, but, more significantly (for this piece, at least), I learned by doing.
As investors, it is important for us all to ask what is it that we are doing. What did we do yesterday? Today? What are we going to do tomorrow? More to the point, how is our doing adding value to our long-run (career) returns. And I pass no judgment on the kind of doing, in particular; I simply caution us to be aware of our doing roles. If you’re the type of investor/portfolio manager that relies on a strong analyst layer to provide you with information, ideas, and analysis, this is fine but make sure to get good at/ become a master at your layer of doing - synthesizing the analyst material and building portfolios. If you are more of the analyst/portfolio manager combo (I confess to being in this camp) and you require a deeper level of intimacy with you investments, make sure to not neglect your analyst work: that actual page turning, word-by-word drudging through of company materials.
Mr. Buffett says, “Know what you are doing.” For a long time, this meant to me that we should know our theses and know that we can handle our theses (i.e. withstand irrelevant noise that may result in short term price drops.) Now having seen the light(s), I have come to respect this phrase on a new, additional level, basically its inverse. Whatever you are doing, you will know, or at the least, grow to know. The cautionary follows very easily from this: choose your doings consciously and carefully.
Recently, I have taken over the control of the light switches in my house. At the age of 32, I can honestly say that this is the first time in my house-living experience (i.e. ex-the few apartments I have lived in) that I have owned this responsibility. What discovery did I immediately find? I had absolutely no idea whatsoever which switch (and it seems like there are hundreds of them) corresponds with which light. Alas, after a week of very scientific method like trial and error, I am confident that I have the situation well in hand; I have mastered not only the switch-light relationships but also have developed a satisfactory system of which lights belong on at what time. I am oozing with self-satisfaction as I’m sure you can tell. But what on earth does this mundane, wee accomplishment have to do with better investing? Hopefully, the following paragraphs will shed some light.
For thirty or so years, I did not do lights. First, there was my mother and then there was my spouse. As a consequence of not doing lights, I did not know them nor how to do them. Only when faced with living in utter darkness was I spurred into action. I learned out of necessity, but, more significantly (for this piece, at least), I learned by doing.
As investors, it is important for us all to ask what is it that we are doing. What did we do yesterday? Today? What are we going to do tomorrow? More to the point, how is our doing adding value to our long-run (career) returns. And I pass no judgment on the kind of doing, in particular; I simply caution us to be aware of our doing roles. If you’re the type of investor/portfolio manager that relies on a strong analyst layer to provide you with information, ideas, and analysis, this is fine but make sure to get good at/ become a master at your layer of doing - synthesizing the analyst material and building portfolios. If you are more of the analyst/portfolio manager combo (I confess to being in this camp) and you require a deeper level of intimacy with you investments, make sure to not neglect your analyst work: that actual page turning, word-by-word drudging through of company materials.
Mr. Buffett says, “Know what you are doing.” For a long time, this meant to me that we should know our theses and know that we can handle our theses (i.e. withstand irrelevant noise that may result in short term price drops.) Now having seen the light(s), I have come to respect this phrase on a new, additional level, basically its inverse. Whatever you are doing, you will know, or at the least, grow to know. The cautionary follows very easily from this: choose your doings consciously and carefully.
