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Re: steamingstockpile post# 17394

Friday, 01/25/2013 10:55:58 AM

Friday, January 25, 2013 10:55:58 AM

Post# of 62968
Save Your Short Game for Golf:Don't Use It to Invest...

If you've ever played golf, you know that getting to the green is usually the easiest part. Within a few strokes, you can cover hundreds of yards, easily more than 95% of the distance to the pin.

Investing can be the same way. The long game is what happens after we've bought -- it's the waiting and watching, while the ball travels though the air, flying out over the nice, short grass in the middle of the fairway, or occasionally veering into the rough. Every so often, it hits a tree and careens wildly out of control, unpredictable and usually not ending up where we want. Sometimes it ends up in the water. Under water.

But most of the time, getting close to the green only takes a few strokes. But depending on the terrain we are in, and where the pin is placed on the green, it's easy to take just as many swings (or more) to cover that last 20 yards. And as investors, we deal with the same thing, but the difference is simple.

In golf, we have to take the swings to get the ball in the hole. As investors, sometimes the best thing to do is just leave our clubs in the bag.

What does that mean?

In golf, as in investing, emotion can ruin your game. Loss of focus and control usually leads to a bad shot. And sometimes that leads to a club following the ball into the water. Talk about putting good money after bad...

It's times of high emotion, much as in investing, that we typically lose focus and try to overcompensate for the previous shot. It's like trying to hit the ball over the water, knowing that your best shot will come up a few yards short. But you do it anyway, and there's your ball. Under water.

As investors, we do the same thing when we respond to share price movement or "the whisper," or try to time our buying and selling to how the market will respond to earnings announcements. We do these things despite the overwhelming data that shows us over and over how there is no predictability in the short term. Heck, the long term is hard enough.

The Kiddie Shortie here is about to eat a BoatLoad of Crow.

COWI all the Way...to 3000%+

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