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KickBackAt40 (85.85)

I’ve earned a “D”

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February 14, 2013 – Comments (5)

I told my wife that as of today, I had become a successful investor. She gave me one of those – “Well, that’s awesome dear!” kind of comments, but didn’t follow it up with one of those “Well, why is that dear?” kind of questions.

This is because investing isn’t really her thing. This is surprising because she likes keeping track of our finances on the expense side. She’s just glad that I like to keep track of the stuff on the investment side of our financial house because she has no interest in it. Her eyes start to glaze over any time I mention the thought that she might have to take care of this stuff, if I keel over or get hit by a bus one of these days.

So, anyway, I had to prompt her with – “Do you know why I say that I’m now a successful investor?” and of course she got the hint and said “Why dear?”

I told her that I had finally got my stock picking accuracy up to sixty percent. Now, my wife was a stellar student back in her school days and I can see that she’s equating sixty percent with the “D” grade on a standardized school grading scale. Not, the same thing, I told her. I’m a little fuzzy on the facts, and they might be out of date anyway, but I told her that most professional investors on Wall Street don’t even manage to beat the market. So, they are wrong over 50% of the time and that’s why a lot of people give up on them and just put money in index funds.

Peter Lynch

In 1989, Peter Lynch wrote a fantastic book about investing called “One Up On Wall Street”. I never got around to reading it back then. I’d sworn off of Wall Street after the crash of 1987. Every spare nickel I had or could borrow was going into the privately held company that I worked for. Yeah, after Enron, everybody knew that was a bad idea. But, the business I worked for didn’t take a rocket scientist to figure out and made a boat load of cash. By the time Enron became the poster child of the corporate ethics seminars, I was retired and diversifying my retirement nest egg into real estate and the stocks of between one and two dozen different companies. Peter Lynch revised his book in 2000 and it was this edition that I finally read. As many of you know, Peter Lynch was a wildly successful investor who had managed the behemoth Magellan Fund for Fidelity Investments. His investment book was one of the best I’ve read on investing and was just as entertaining as it was educational. It’s also as relevant today as it was when it was revised over a decade ago.

Peter Lynch wasn’t too bashful about listing some of the great mistakes he made as an investor. In fact he said it’s just fine by him, to only be right sixty percent of the time.

So, there you have it. I finally earned a “D” and I’m proud of it!

5 Comments – Post Your Own

#1) On February 14, 2013 at 11:24 PM, HarryCarysGhost (99.70) wrote:

Congrats, but keep striving for that C grade.

Funniest thing my wife said about stocks when I go on a rant-

Honey, I love you, but your giving me a headache.

She does'nt ask anymore:)

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#2) On February 15, 2013 at 12:16 AM, awallejr (83.92) wrote:

LOL. Enjoyed the blog now work on that B;p

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#3) On February 17, 2013 at 1:43 PM, Mary953 (73.63) wrote:

Hmmm... I cannot wait for my husband to retire and tackle learning about the stock market.  He is the sort of math whiz that will absolutely love it - but only when he has the time to do it right.  That is not right now.  I bump along okay by sticking with stuff I understand (Disney after buying Marvel, Garmin when the GPS was new, Netflix just after movie prices went up again, stuff that makes sense) but I would love to see how he will do with money to invest and time to do due diligence.

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#4) On February 24, 2013 at 4:11 PM, ikkyu2 (99.32) wrote:

Accuracy doesn't matter in real-world investing.  One of my favorite investors and writers about investing and especially trading, Charles Kirk, aims for a 25% accuracy in his trades.  However, he is looking for the kind of trade that, when it is successful, has a big upside.  Along with a rigorous stop-loss policy and a willingness to let the flowers bloom, that low accuracy makes him a lot of money.

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#5) On February 24, 2013 at 4:12 PM, ikkyu2 (99.32) wrote:

Also, I think it's tough to be Peter Lynch.  Here are some reasons why:

a)  He's smarter than you are.

b)  He worked harder at investing than you do.

c)  He was working before Reg FD, and he had a lot of money under management, so when he called insiders and asked them about their company's financials, they had both an incentive and no disincentive to be frank with him. 

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