John Chew, publisher of “csinvesting“, which it only took me about two weeks to realize stood for “Case Study Investing”, was kind enough to respond to a personal e-mail I sent him by publishing his reply on his blog.
The post itself is a great reference, like everything on John’s blog, and I wanted to link to it here to make sure I always can find the link again for future review. A few of my favorite sentiments are below:
You never “master” investing which is why the journey is fascinating.
Rational humility, the moment you think you know it all, you learn about a shortcoming you never knew you had.
Investing really is constant applied learning which is cumulative.
“Compounding” returns to one’s investment of time and energy in learning the trade!
Foxes are eclectic, viewing the world through a variety of perspectives, with no allegiance to any single approach.
Don’t box yourself in with silly mandates or addiction/devotion to one strategy or style. Markets are dynamic and the best strategy is not the same at all times and in all places. The natural laws of reality dictate that basic truths and financial mechanics will always be active and provide general boundaries within which a rational, conservative investor must operate (such as margin of safety and the principle of buying value at a discount), but even Ben Graham in The Intelligent Investor clearly demonstrated that different markets provide different opportunities: sometimes it is the opportunity to buy outstanding businesses at a discount, sometimes it is the opportunity to buy certain businesses for less than their liquidation values, sometimes it is the opportunity to take advantage of special situation arbitrage, etc.
Few great investors are overnight successes. Many have to overcome failure.
It’s unreasonable to expect perfection because we are not omniscient. We will misstep and occasionally even fall. The art is in finding ways to take tumbles that do not break your leg, back or skull, and learning to pick yourself up again.
Money is about freedom, not consumption.
Money is the ultimate form of potential opportunity. It helps us with, “What can I do?” and not, “How much can I have?” Life is dynamic and it is lived best through abundant action, not abundant accumulation (static).
[Great investors] enjoy the process, not the proceeds.
We have a relative great deal of control over the process we employ, but relatively less control over the proceeds that result from that process. We are not omnipotent– life is volatile. There will be disappointments. Self-esteem and self-satisfaction are built on acting the best way we know how, not achieving the best we know of at any given moment. In life, a journey is guaranteed, a destination is not. Best to learn to savor the ride as it’s all you’ve ever got until it’s over.
Ever wonder why a steel company fluctuates more in earnings and price than a beverage company? The distance from the consumers in terms of time and production structure. Look at your watch. How long did it take to make? Two hours? Well, who mined the sand to make the glass? Who mined the metal to make the case? Who killed the cow to make the leather wrist-band? And who planned all the production? Perhaps your watch took two years from the moment of assembly to the first production of the materials.
A great application of Austrian economics to investment analysis!
Good reminders, all.