How much time do you spend on investing

[Liberty]

I think I'm spending too much time on investing. I just had a dream last night that Sardar Biglari got arrested for personally poisoning the food of other competitors in some sort of competition. The Biglari Holdings thread here then got so hot that it crashed the server.

 

  ;D

[oddballstocks]

It seems to me that originality and doing a lot of your own proprietary research have a negative effect on quality of life for most (unless you have no other interests) but a positive effect on your career prospects in the investment industry, while intelligent cloning has the exact opposite effect.

 

I do a lot of my own research, I'd disagree that it has effected the quality of my life for the worst.  Sure, you can't be obsessed about something, but who does their best work when obsessed?  Best work is done when disciplined.

 

Liberty has mentioned the keys to the kingdom though.  Find small and simple companies that are overlooked.  Some publish reports once a year so keeping up is a 30m activity.  Others publish updates quarterly, but it doesn't take long to read through a 5-8 page report.

 

Why do these opportunities exist?  Try to pitch a small stock to any professional, the first response is "I can't invest in that stuff."  So you're investing with management, families and other retail investors.  In so many of these companies shareholders are legacy and have mostly forgotten about their holdings.  It's not hard to have an information advantage when everyone one else has tuned out!  But an information advantage isn't even necessary, just enough information to know a company is safe and cheap, then the patience to see the investment through.

 

You can spend as much time as you want on this, but I don't think it takes much.  Imagine a portfolio, you want to own 25 positions.  To build this you need to find two positions a month, not a terrible task.  It takes maybe 30s to 1m to eliminate a company if going A-Z, most of the time even less.  The crap pink sheet stuff can be eliminated in seconds.  If you have an efficient setup you can churn through a list of 100 stocks in a hour or less.  I have done some smaller exchanges in under an hour, Canadian National Exchange comes to mind.  Maybe took me two days to go through Portugal a few years back.  If you're looking for two investments a month you're going to find those and plenty more going through a list like this.

 

If you want to clone or find ideas from others you could probably build a portfolio quickly.  The problem with cloning is it takes almost as much time to find out if the person you're cloning is decent verses doing your own work.

 

I prefer small unlisted unfollowed stocks myself, I mostly write about them on a blog I keep.  The link under my username links to my blog.  If you truly like this space there are some posters on here who own a lot of these stocks and are great resources.  A sort of community within a community.

 

There are many ways to make a buck.  Most on here would rather find high ROE companies or read the AIG filings, and that's fine.  There are some wealthy investors on here that've gotten there from doing that sort of stuff.  You need to find what works for you.  I wanted a strategy that fit my life, that wasn't consuming and was built with companies that I trust if I don't hear from them for months or even all year.

 

Just because people on Wall Street run around like maniacs and are glued to every tick doesn't mean that everyone needs to be.  Heck most of my portfolio doesn't even trade on any given day.

 

Hope this helps.

[berkshire101]

The best thing about investing is that there are many ways to skin a cat, figuratively of course.

[innerscorecard]

 

I do a lot of my own research, I'd disagree that it has effected the quality of my life for the worst.  Sure, you can't be obsessed about something, but who does their best work when obsessed?  Best work is done when disciplined.

 

...

 

Just because people on Wall Street run around like maniacs and are glued to every tick doesn't mean that everyone needs to be.  Heck most of my portfolio doesn't even trade on any given day.

 

Hope this helps.

 

You're right of course. I didn't think my words through carefully and looking back on it my statement was wrong. It's really not a dichotomy like that at all.

 

The reason I said what I did was thinking about reading 500 pages a day (I know that's apocryphal) and also thinking about the many other things there are to do in life as well. I like reading, but I don't want to be only a book with legs, as Munger says. The book that really got me turned on to investing was the Snowball -  but I liked it also because it talked about the personal costs of being obsessed with investing. The image of Buffett ignoring his family and having Susan move out because she couldn't bear it anymore is to me a cautionary tale.

 

I think the question is also whether one's goals are to be a great investor or to invest for the purpose of meeting one's own personal financial (or I suppose) goals.

 

By the way, I've been a subscriber to your blog for quite a while now and really appreciate your writing. Not just the companies you cover, but especially when you talk about what it means to invest in stocks and what it means to do business. I find your approach and synthesis of ideas very fresh.

[oddballstocks]

 

I do a lot of my own research, I'd disagree that it has effected the quality of my life for the worst.  Sure, you can't be obsessed about something, but who does their best work when obsessed?  Best work is done when disciplined.

 

...

 

Just because people on Wall Street run around like maniacs and are glued to every tick doesn't mean that everyone needs to be.  Heck most of my portfolio doesn't even trade on any given day.

 

Hope this helps.

 

You're right of course. I didn't think my words through carefully and looking back on it my statement was wrong. It's really not a dichotomy like that at all.

 

The reason I said what I did was thinking about reading 500 pages a day (I know that's apocryphal) and also thinking about the many other things there are to do in life as well. I like reading, but I don't want to be only a book with legs, as Munger says. The book that really got me turned on to investing was the Snowball -  but I liked it also because it talked about the personal costs of being obsessed with investing. The image of Buffett ignoring his family and having Susan move out because she couldn't bear it anymore is to me a cautionary tale.

 

I think the question is also whether one's goals are to be a great investor or to invest for the purpose of meeting one's own personal financial (or I suppose) goals.

 

By the way, I've been a subscriber to your blog for quite a while now and really appreciate your writing. Not just the companies you cover, but especially when you talk about what it means to invest in stocks and what it means to do business. I find your approach and synthesis of ideas very fresh.

 

Thanks, appreciate the kind words.  Snowball is an enlightening book, it really does cover the costs.  There's another book that's worth reading, "How To Get Rich" by Felix Dennis.  He poured his life into money and then wrote this book on the other side.  It's very Solomon-esqe wisdom.  Essentially if you think that money will make you happy it won't.  It's a nice refreshing break from all of the success stories where no one regrets trashing their life in pursue of the dollar.  This guy trashed his life (literally) and then said it wasn't really worth it.  You could probably read the book in a sitting.  He doesn't just talk about being rich, he talks about how to manage people, sell companies and all sorts of other things.  For a few bucks used on Amazon it's worth a few afternoons.

 

If you're not turned off by religious things I'd encourage a read of Ecclesiastes as well.  It's really the ancient version of the above.  A king gets the world then realizes "what's the point of this?"  A lot of people are in blind pursuit of success without ever really thinking about what success is or what it means.

[innerscorecard]

I just finished Dennis' How to Get Rich just two months ago, actually. After I finished the book I Google'd Felix Dennis only to find that he had recently passed away. And now Maxim, the pride of his empire, is a diminished thing that Sardar Biglari is trying to reinvigorate. But Dennis actually did predict the passing of his industry as well. The book was written late enough for that.

 

I think Dennis is most insightful when he talks about the oddity of saying you want to be a billionaire or to be truly rich, like Buffett said he knew he wanted to be and like Pabrai said he wanted to be as well (not just $5 million USD "comfortably poor," as Dennis would define the wealth level of many of the successful individual investors on this board!). It really is such a weird thing to want.

 

(Edited for grammar only.)

[Uccmal]

psshhh 500... your slacking  ::)

 

He was being sarcastic.

 

Todd Combs reads 500 a week but was mis-quoted for 500 a day and Ted Weschler spends 500 hours before he buys a stock typically.

It was discussed in great length last year where multiple board members pondered how to read more to be like Todd and Buffett.

 

I am changing my research process to only buying companies mentioned on COBF once the thread has 500 pages.  :D

 

Lets see... That would have netted you LVLT, SD, SHLD....  you'd be bankrupt by now. 

 

 

[stahleyp]

psshhh 500... your slacking  ::)

 

He was being sarcastic.

 

Todd Combs reads 500 a week but was mis-quoted for 500 a day and Ted Weschler spends 500 hours before he buys a stock typically.

It was discussed in great length last year where multiple board members pondered how to read more to be like Todd and Buffett.

 

I am changing my research process to only buying companies mentioned on COBF once the thread has 500 pages.  :D

 

Lets see... That would have netted you LVLT, SD, SHLD....  you'd be bankrupt by now.

 

 

hahaha. Don't forget about BAC! That one would have worked out well though! ;)

[Liberty]

Thanks, appreciate the kind words.  Snowball is an enlightening book, it really does cover the costs.  There's another book that's worth reading, "How To Get Rich" by Felix Dennis.  He poured his life into money and then wrote this book on the other side.  It's very Solomon-esqe wisdom.  Essentially if you think that money will make you happy it won't.  It's a nice refreshing break from all of the success stories where no one regrets trashing their life in pursue of the dollar.  This guy trashed his life (literally) and then said it wasn't really worth it.  You could probably read the book in a sitting.  He doesn't just talk about being rich, he talks about how to manage people, sell companies and all sorts of other things.  For a few bucks used on Amazon it's worth a few afternoons.

 

I enjoyed that book. Was sad to see Dennis' obituary in The Economist a few months back.

[Scudbucket]

My friends and family probably put me in the obsessed camp.  I spend most of my day thinking, reading, or doing something related to investing.  I find it fascinating.  It's humbling.  It's challenging.  It's new every day.  The money is a motivator, for sure, but that's definitely not the driving factor - not even close.  I just think it's fun.

[tede02]

I will happily be comfortably poor!  I'm guess I probably already am.  It's hard to complain much when the median household income in the US is $50k.  That blows my mind every time I see it.  Again, that is household income, not individual. 

[Scudbucket]

I will happily be comfortably poor!  I'm guess I probably already am.  It's hard to complain much when the median household income in the US is $50k.  That blows my mind every time I see it.  Again, that is household income, not individual.

 

I'm amazed at how people will often spend weeks researching a $500 TV or planning their vacation, but they don't spend any time planning for their financial goals.  I don't get it.  Everything seems backwards to me.

[innerscorecard]

I will happily be comfortably poor!  I'm guess I probably already am.  It's hard to complain much when the median household income in the US is $50k.  That blows my mind every time I see it.  Again, that is household income, not individual.

 

I'm amazed at how people will often spend weeks researching a $500 TV or planning their vacation, but they don't spend any time planning for their financial goals.  I don't get it.  Everything seems backwards to me.

 

As any good Boglehead would tell you, it's more worthwhile to spend hundreds of hours on cashback and deal sites than to spend any time at all researching individual companies, since anyone who beats the market is simply "fooled by randomness" because the time period isn't long enough. ::)

[berkshire101]

I will happily be comfortably poor!  I'm guess I probably already am.  It's hard to complain much when the median household income in the US is $50k.  That blows my mind every time I see it.  Again, that is household income, not individual.

 

I'm amazed at how people will often spend weeks researching a $500 TV or planning their vacation, but they don't spend any time planning for their financial goals.  I don't get it.  Everything seems backwards to me.

 

#YOLO. 

[UNF2007]

Really like the "how to get rich book" started it today. For me there is some mental hurdle where I get myself comfortable to the point I feel something is a good bargain and I can see myself holding it for 3-5yrs and averaging down if it falls. Once I own something I continue to read about the company/industry until I sell it, trying to accumulate knowledge for the future. Kind of like reading about your patients in residency. I would guess probably 200-300hr per company, over the life that I own it.