The 1 Thing Successful Investors Never Do

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marcjones
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The 1 Thing Successful Investors Never Do

Post by marcjones » Wed Oct 22, 2014 6:43 pm

Came across this article on the Motley Fool which I thought was good

http://www.fool.com/investing/general/2014/10/22/the-1-thing-successful-investors-never-do.aspx

RadAudit
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Re: The 1 Thing Successful Investors Never Do

Post by RadAudit » Wed Oct 22, 2014 8:21 pm

Thanks for the post.

few people know that they (Buffet and Munger) used to have a third partner: Rick Guerin. Guerin was in a hurry to get rich and was borrowing money using margin loans to invest in the stock market. In the market downturn of the early 1970s, when the stock market dropped roughly 70%, Guerin got margin calls and was forced to sell all of his Berkshire Hathaway stock to Buffett at $40 per share to get money to pay back his debt. Those Berkshire Hathaway shares now trade for just over $200,000 each.


Now that I didn't know. About Guerin. I was sort of familiar with the idea that leverage worked both on the way up and the way down.
FI is the best revenge. LBYM. Invest the rest. Stay the course.

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Boonedog
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Re: The 1 Thing Successful Investors Never Do

Post by Boonedog » Wed Oct 22, 2014 8:26 pm

"The 1 Thing Successful Investors Never Do", read Motley Fool.

nwffdiver
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Re: The 1 Thing Successful Investors Never Do

Post by nwffdiver » Wed Oct 22, 2014 8:35 pm

Good read.. I wanted to post all of the things I have done wrong, so maybe some young people won't lose out on all the years I did.

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Re: The 1 Thing Successful Investors Never Do

Post by freebeer » Wed Oct 22, 2014 8:49 pm

marcjones wrote:Came across this article on the Motley Fool which I thought was good

http://www.fool.com/investing/general/2014/10/22/the-1-thing-successful-investors-never-do.aspx


Really? From the article:

"...never give up... Whether your strategy is index investing or a more active form of investing, those who succeed in investing are those who are able to compound their money over the long term by staying in the game"


If you are playing a bad game then "never give up" is poor advice. If your game is day trading or commodities futures or options trading or even just investing in actively managed mutual funds that don't beat inflation net of fees, you may well be pursuing a losing proposition... just like someone sitting at the craps table at a casino. Much better to give up, immediately!

"Stay the course" is a great principle ... but only if you aren't on a crash course...

marcjones
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Re: The 1 Thing Successful Investors Never Do

Post by marcjones » Thu Oct 23, 2014 12:59 pm

Even if you are on a crash course, better to be in the game than out of it. Only way you are ever going to learn.

Many of the greats have crashed and burned only to come out stronger, Buffett was a technical investor for 10 years before discovering The Intelligent Investor.

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dratkinson
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Re: The 1 Thing Successful Investors Never Do

Post by dratkinson » Thu Oct 23, 2014 2:26 pm

"Never give up." Glad someone posted it as I'm a little dense today and couldn't figure out what that one thing was. From the Guerin comment, I was going to guess "buy on margin", but maybe that's not the one thing.

Also note that last paragraph links to a "hot stock" shill. Guess whatever I'm doing isn't good enough, so I should "give up" and try something else.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

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nisiprius
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Re: The 1 Thing Successful Investors Never Do

Post by nisiprius » Thu Oct 23, 2014 2:44 pm

marcjones wrote:Even if you are on a crash course, better to be in the game than out of it.
It's a game?
Only way you are ever going to learn.
"Experience keeps a dear school, but fools will learn in no other."--Benjamin Franklin
Many of the greats have crashed and burned only to come out stronger, Buffett was a technical investor for 10 years before discovering The Intelligent Investor.
The great Jesse Livermore lost all his money and committed suicide.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: The 1 Thing Successful Investors Never Do

Post by Fallible » Thu Oct 23, 2014 5:26 pm

freebeer wrote:
marcjones wrote:Came across this article on the Motley Fool which I thought was good

http://www.fool.com/investing/general/2014/10/22/the-1-thing-successful-investors-never-do.aspx


Really? From the article:

"...never give up... Whether your strategy is index investing or a more active form of investing, those who succeed in investing are those who are able to compound their money over the long term by staying in the game"


If you are playing a bad game then "never give up" is poor advice. If your game is day trading or commodities futures or options trading or even just investing in actively managed mutual funds that don't beat inflation net of fees, you may well be pursuing a losing proposition... just like someone sitting at the craps table at a casino. Much better to give up, immediately!
"Stay the course" is a great principle ... but only if you aren't on a crash course...


I've often wondered, apart from this article, whether in every instance the investor being told to stay the course is on the right course. In most cases, it would be hard or impossible to know. The statement seems to assume they are and it's probably a safe assumption in the Boglehead context. Or maybe it should be, "Stay the right course." I don't know.
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

kazper
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Re: The 1 Thing Successful Investors Never Do

Post by kazper » Fri Oct 24, 2014 11:07 am

Boonedog wrote:"The 1 Thing Successful Investors Never Do", read Motley Fool.


Agreed. The first investing book I picked up was Motley Fool. I can remember thinking: "This is a lot of work to pick stocks, especially when you might be wrong. If putting in the time and effort of doing research won't help you, what will...? When there wasn't an answer to that question, I moved on.

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Toons
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Re: The 1 Thing Successful Investors Never Do

Post by Toons » Fri Oct 24, 2014 11:16 am

Reminds me of what Peter Lynch said when it came to investing:

“The stomach is the key organ here. It’s not the brain.” :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

marcjones
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Re: The 1 Thing Successful Investors Never Do

Post by marcjones » Sat Oct 25, 2014 7:41 am

The Peter Lynch quote is good and relates to the below sentiment.

kazper wrote:
Boonedog wrote:"The 1 Thing Successful Investors Never Do", read Motley Fool.


Agreed. The first investing book I picked up was Motley Fool. I can remember thinking: "This is a lot of work to pick stocks, especially when you might be wrong. If putting in the time and effort of doing research won't help you, what will...? When there wasn't an answer to that question, I moved on.


With both active and passive investing, you need to have the stomach to keep putting money in when the market is down and the future looks bleak.

You can put time and effort into learning passive investing, but if you let your emotions get the better of you you can still do poorly.

TheSuperHappy1
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Re: The 1 Thing Successful Investors Never Do

Post by TheSuperHappy1 » Sun Oct 26, 2014 2:29 pm

Good article, thanks for posting

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