Par 5 (Financial Athlete #14)

Before teeing-off a golfer knows the par for the hole. He analyzes the landscape before each stroke. His clubs equip him for a wide range of possibilities of where ball will land, including a wedge for the sandpit. This is how an experienced investor patiently goes about his business.

In contrast, an overconfident, novice investor pays no attention to par. He approaches investing as though a hole-in-one is an everyday event for a golfer, regardless of the distance of the hole. Therefore, he uses only one club, a driver. In his inexperienced mind, all will go smoothly. The wind will never carry the ball off the fairway. The ball will never bounce off a tree or land in the pond or sandpit. His game is driven entirely by positive thinking. All unpleasant facts are dismissed. Often it takes a great financial loss to awaken him to gaze upon what is, rather than how he would like things to be.

(Photo above: Pebble Beach, CA golf course)

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