A game of inches (The Financial Athlete #15)

Golf is the epitome of a “game of inches.” To miss one put by less than an inch can cost the game. Professional golfers practice puts for thousands of hours. Without frequent practice, even the best of them can lose their touch. Much time alone dedicated to practice will not do. The mind of the golfer must be completely concentrated.

One aspect of investing is the “game of inches”. Consider how Warren Buffett spends hours combing through Annual Reports and SEC filings. If you choose to invest in individual stocks, you should do no less. Read thoroughly financial statements and the fine print. Readng SEC filings may be an intimidating exercise at first, but you will grow accustomed to the parlance. Don’t buy until you understand the material. What good is due diligence without understanding? This is like putting without concentrating. If you are not yet financially literate, then you are not ready for investing in individual stocks. Fortunately for real estate investing, help is easier to find with a real estate attorney who can make sense of the confusing legalese. Never be too proud to ask for help from a competent accountant or lawyer if you need a clearer understanding of an investing prospect. These people are trained to play the “game of inches”.


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