As I have mentioned a time or two in the past, I think one of the biggest lessons investors (professional or otherwise) need to learn is to put the T.V. on mute, to avoid reading everything on the internet, to stop listening to “tips” and “trades,” and to forget about the “fast money” altogether. Instead, serious investors need to focus on developing their own “inner circle” of folks they trust and listen to – and then ignore everyone else!
For me personally, I prefer to keep the list of professionals I read/listen to pretty darned small. I don’t do this because I think I know more than the next guy. I probably don’t, as there is an abundance of highly educated guys/gals on Wall Street that are a lot smarter than I am. However, I have learned over the years that I need to think for myself and, perhaps more importantly, to implement an investing style that suits my personality.
For example, a black-box quant system can be a great way to invest. So too is a completely subjective, discretionary trading style. And employing option-based hedging strategies to a long-oriented equity portfolio is a strong approach. And then there are there any number of purely technical trading strategies, to say nothing of the long-only, buy and hope approach, etc., etc.
The bottom line though is I can’t use any of the above. None of these approaches “work” for me in my head. You see, I have tried a LOT of strategies over my 30 years (most of them in my younger days) of professional investing – and I have learned that I can’t simply give up all control and let a black box run my money. Nor can I trust myself to run a completely flexible, go-anywhere trading style for any length of time. I can’t do it. And I know this.
So, the first point on this fine Tuesday morning is to first learn to “know” and then “trust” yourself.
This was also a rather convoluted, long-winded way of saying that I read something from one of “my guys” yesterday that was so good, I want to share it – in its entirety.
