Posts Tagged ‘mistakes’

Take the open shot! (The Financial Athlete #33)

July 30, 2008

“I never looked at the consequences of missing a big shot… when you think about the consequences you always think of a negative result.” – Michael Jordan

You’ve been playing basketball almost since the day you learned how to walk. You’re comfortable making the jump shot in practice from any reasonable distance. In game time the coach calls you off the bench. The star player is double teamed and passes the ball to the open man — you! This is your opportunity for an easy bucket at one of your sweet spots, mid range. Yet, you hesitate and don’t shoot. You pass the ball to a teammate who’s covered.

Why didn’t you shoot? Are you afraid of missing? Don’t overestimate the severity of the consequences of missing. Take the open shot!

To identify a great investment opportunity and do nothing about it gets you nowhere. You might as well be playing in the sandbox. Execution of transactions makes people money. Don’t be afraid of making a mistake with a purchase of an investment vehicle after you’ve done your homework.

The beauty of investing is that you can be wrong 9 out of 10 times and still come out ahead. For example, if you invested in 10 stocks, $1,000 for each, and lose an average of 10% on 9 of the 10, but gain 200% on the 10th, your original investment of $10,000 returns a gain of $1000.

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“Yes is the key to unlock the door to our grandest dreams.”
–‘pastamanvibration’ (Ao)

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