Baking and Investing Have Much in Common

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Baking and Investing Have Much in Common

Postby Rick Ferri » Thu Jan 31, 2013 10:40 am

Managing a successful investment portfolio is like baking a State Fair award-winning cake. They both require high-quality ingredients, mixed in the right amounts, and discipline when baking. Decorating is important too, although no amount of frosting will cover-up marginal ingredients or careless baking.

Investing Well is Like Baking an Award-Winning Cake

This article is an introduction to low-cost index fund investing.

Rick Ferri
Mutual fund investing is simple. There is risk, there is return, and there are costs. All else is marketing.
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Re: Baking and Investing Have Much in Common

Postby bertilak » Thu Jan 31, 2013 1:06 pm

Rick Ferri wrote:Managing a successful investment portfolio is like baking a State Fair award-winning cake.

    Just don't leave the cake out in the rain!
    I don't think that I could take it
    'Cause it took so long to bake it
    And I'll never have that recipe again!

    (With apologies to Richard Harris)
OK, I don't know what that means but it is the first thing that popped into my head when I read your post.
No-one really listens to anyone else, and if you try it sometime you will see why. | -- Mignon McLaughlin
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Re: Baking and Investing Have Much in Common

Postby Fallible » Thu Jan 31, 2013 1:47 pm

Rick Ferri wrote:Managing a successful investment portfolio is like baking a State Fair award-winning cake. They both require high-quality ingredients, mixed in the right amounts, and discipline when baking. Decorating is important too, although no amount of frosting will cover-up marginal ingredients or careless baking.

Investing Well is Like Baking an Award-Winning Cake

This article is an introduction to low-cost index fund investing.

Rick Ferri


A good and fun introduction for those new to indexing and one to recommend when newbies appear on the forum looking for help. BTW, last time I saw a food analogy in investing was Bill Schultheis's pumpkin pie in "The Coffeehouse Investor." It was a reason I found the book so much fun to read all the while I was learning.
"The first principle is that you must not fool yourself - and you are the easiest person to fool." ~ Richard Feynman
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Re: Baking and Investing Have Much in Common

Postby retiredjg » Thu Jan 31, 2013 1:56 pm

I like it Rick!

I frequently use a "cake" and "icing" analogy myself, but I never thought of several other similarities that you mentioned. My favorite is "....an unwillingness to let time do its magic...." It's true. Your cake won't be any good if you don't cook it long enough. Or open the oven door every 2 minutes to see how it is doing. :D
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Re: Baking and Investing Have Much in Common

Postby bertilak » Thu Jan 31, 2013 2:02 pm

I like this one:
There are many more cake decorators than there are quality bakers among the thousands of registered advisers.
No-one really listens to anyone else, and if you try it sometime you will see why. | -- Mignon McLaughlin
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