There are three things extremely hard: steel, a diamond, and to know one’s self. - Benjamin FranklinMy wife and I were recently in Louisville, Kentucky catching a short vacation during her school's spring break. (A really neat city, by the way -- and the Maker's Mark distillery is worth the short drive when you're in town.)
And of course as a huge baseball fan, a trip to Louisville isn't complete without a trip to the Louisville Slugger factory and museum to see how major league bats are made.
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| The Louisville Slugger Museum & Factory |
Unsurprisingly, the results weren't pretty. I was used to a much lighter and somewhat shorter bat and struggled to react to the pitch as it came toward me. The Splendid Splinter would have had a good laugh, but it was a fun experience nonetheless.
In investing, as with hitting a baseball, we often end up looking silly when we step far outside our comfort zone. Just as I had poor results swinging the wrong kind of bat, I'm likely to have poor results investing in the wrong type of stock.
Now, a type of stock isn't "wrong" in itself and other investors may do quite well with it, but it might not be "right" for me.
For example, I'm not very good at analyzing and investing in early stage technology companies. The reason I know this is that I've been around people who are good at it and I don't share the necessary vision, risk tolerance, and emotional discipline to do it as successfully as they do. On the other hand, they'd probably get impatient with dividend investing and make their own set of errors. To each his own.
Whether you're more suited to one type of investing or another is neither good nor bad. One of the most important things to learn as an investor is to recognize what you're not good at and then avoid doing those things.
Stay patient, stay focused.
Best,
Todd
@toddwenning on Twitter
