While I will not say that investing is easy--remember I am a novice--but like most things it is broken down into manageable parts. But there were a couple of analogies this weekend that reminded of thematic similarities among different subjects. So here are a couple of examples as they relate to investing (at least in my mind).
First cooking. I've never cooked a standing rib roast before. At $105 dollars, I sure didn't want to ruin it. I read about 5 different ways on how to get to the same result: a perfectly roasted piece of premium meat. Do you want a crust on your roast? Then you must roast it at 450-475 (different opinions on temp) for more than 30 minutes and less than 1 hour. Then you cut the oven back (some say 325, some say 350, some say 375). I opted for 325. Was there any unanimous and incontrovertible advice? Yep, there is--you must have a perfectly calibrated, digital instant read thermometer. Would I have been dissatisfied with using one method over the other? No. It was all noise--as each method had identical endpoints. There are many investment styles (e.g. growth v. value), and more than one can yield the same result which is portfolio appreciation at manageable risk.
Second, football. I attended Virginia Tech, so I had great interest in the game--Peach Bowl now the Chick-filet bowl. VT was leading--convincingly, seemingly indomitably--through second half. Outcome? GA 31...Tech 24. How is that similar to investing? Past results do not guarantee future results. Every play, maximize your yardage and minimize mistakes. You can play quite well, but if you have costly turnovers--and you don't need many--you can lose the game.
2 comments:
The ACC was pretty awful this year. NC State won three games this year- but two of them were against the ranked teams in the ACC. That's the same number of victories against ranked teams that VT had. Why is Kent State on your schedule near the end of the year?
It is not looking good for Wake Forest at the moment either.
Hopefully next year the ACC will be a little less embarrassing.
My neighbor's son is attending VT, and I didn't even realize they were in the bowl game until Tim mentioned it. So, you can see that I don't follow THAT closely.
Though I don't enjoy sports much, I attended every home basketball and football game. And I never left a game until it was over--no matter what the score.
After two years and a tripod fracture of the right zygoma (errant softball thrown that made contact with my cheek), I transferred to VCU (that damned hippie college as my Dad would say). So it was weird going to a school with no football team. I never could muster up any enthusiasm for Rams basketball.
NOw, I only watch important games so long as someone lets me know either accidently or purposely that VT is playing. My UVA colleagues always reminded me of upcoming matches--that's a pretty big rivalry here.
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