Posts Tagged ‘research’

Camaraderie (The Financial Athlete #34)

July 31, 2008

One of the benefits of participating in sports is the camaraderie. On a playing field your best friends can be found, sometimes friends for life. You’ll also encounter personalities you don’t particularly care for, but team sports forces you to get along with them. Fortunately, those unpleasant types depart from your life when the season ends.

Investors have the luxury of not having to daily tolerate difficult bosses, co-workers, or clients. Oh, how lucky…but not really. Investing is mostly a lonely profession. Man, being a social animal like a wolf, needs a pack. For this reason, investors are prone to form a network of investors. Is this a detriment or an edge to returns? Obviously, it depends on who’s in your network, but isn’t there something disturbing about this question? We are obsessed with measuring everything in our culture. Instead of eating for pleasure, we count calories. Instead of running for play, we count laps. Instead of enjoying the company of a new acquaintance, we calculate whether she can lead us into a shortcut to advance in the complex maze of the rat race….

Aside the camaraderie, a team of competent and trustworthy people should share direct and indirect research and analysis. For investing in stocks direct research involves interviewing company management and participants in the industry including suppliers, competitors, and customers. Indirect research involves reading press releases, industry news and trends.

The world is flooded with information, too much for one set of eyes to observe.

‘It is better to be betrayed than to trust no one.’ — Fijotsudoela saga ch. 13