Value Investor Mea Culpa
I am afraid I have been a fool. Examining my past couple months of returns, this became obvious. While the returns havenot been disastrous, they should have been better. In fact, I would say I am lucky I have not done worse (down about 2% on year) given the many traps and shortcuts I have fallen into. I have diverged from the process that has historically led to my success-- and this post is aimed to keep myself accountable!
-Bought into assets without doing my own, independent analysis, instead relying on the work of others as a shortcut
-Bought into "growth stories" with very little assets-- mistakingly placing valuable capital at risk on the hopes of rosy growth assumptions that will likely not materialize
-Been overly aggressive in my allocations-- focusing too much on the upside in the investment without fully considering the risks
-Ultimately turned my back on my own value investing principles and acquired knowledge
-Abandoned the essential virtue of discipline when it was needed most
This is my mea culpa. A month and a half into 2012, I find myself trailing the S&P by about 3%. With a long-term time horizon, this is not the issue. More concering, however, has been my process, which will surely lead to more lagging results if not immediately changed.
I'm looking forward to getting back to discipline and a great 2012!