Investing = WORK

[Olmsted]

Only Seeking Alpha since the quality of the articles there is unquestionably superior to anything one can find elsewhere.  I believe that if alive now Graham would probably be posting there as well, it's that good.

 

You made me read this twice.  ;D

[Uccmal]

The majority of my reading would not be Financial reports.  An awful lot of time is spent getting to know something via general news, reports, this board, etc.  The financial reports come when I am deciding whether something is actually worthwhile to investigate further.  Dell being a case in point.  I have skimmed the 10k s, more recently, read one on detail 3 years ago or so, but cant bring myself to waste further time on it. 

 

A huge amount of effort has been spent by the financial press at large to understand Buffett's success. 

 

1) He loves it

2) He is smart, probably the smartest guy in the room at what he is doing.

3) Temperment - how many times through his career has he dove in and/or packed it in when most others were going the opposite way.  He also defines what he calls his CofC very well. 

4) He is comfortable not knowing (the cases here include WP, Amex, GS, GE, WFC, and on and on).  This involves understanding when the odds are in his favour.

 

There is a whole hell of alot more than just reading. 

[writser]

Writser...Not saying it applies to you, but I don't think one can call it work. It is fun, not work and who would not want to be obsessed with having this much fun. I always say that I'm not scared to go up against people with more brains than me, because that accounts for the most of them. I'm not scared to go up against the person that started out with more resources and better connections or that was born in the right country/city etc compared to me, because that once again accounts for the most of them. However, the person that does scare me is the one that is more passionate about investment than me, because he/she is having fun while I'm "working" and when it comes to fun v work it is no competition. I'm playing around with words, but I think you will catch my drift.

 

I see your point of view.  I enjoy visiting this forum and I track companies that might be good investments "for fun". I like the concept of thorough research and value investing and do not believe in a quick buck, unlike most people. However, the fact that it is just a hobby for me and that I can practice it if (and only if) I feel like it is probably one of the reasons it appeals so much to me. If one has to put in the same effort as David Einhorn and WEB I doubt whether most of the posters here would still like it as much. Would you really be able to enjoy investing if you had to do it for 10 hours a day 5 decades long? If you had to read all annual reports from all S&P 500 companies from the past 10 years? If you had to endure the internet bubble full-time for a couple of years while your own portfolio only goes down?

 

I'm not sure (the path towards) being an excellent investor is fun. That's easy to say if you only spend a couple of hours each week on investing (take no offfense, I'm just describing myself :)). Few people have the obsessive drive and discipline required. It's the same with poker. Everybody loves it, lots of people try to "go pro" and 99.99% of them fail miserably. The swings are stressful, it gets boring and it is hard to stay disciplined. For most people it's a great hobby but a terrible job.

 

The good thing about investing for a living is that you can also do it with OPM and earn fees.

[Uccmal]

I would think that knowing yourself and how much investing you can handle is also a Cof competence item.  Buffett plays bridge, travels, gives talks, goes to meetings, relaxes with friends at a steakhouse, etc.  He even played bridge for days with Gates on a rented train. 

 

Einhorn and Ackman like to butt heads in deal making.  All the prep they put in gets to be applied in games of brinksmanship.  They aren't just sitting and reading all day. 

 

All hobbies that are fulfilling require us to do things at times that aren't always the most fun as well.  Sometimes it can be work.  My dad loves woodworking but periodically at home we would hear great strings of foul language emanating from the basement when he screwed something up, and had to redo it, or start over.

 

It all comes down to knowing ones self.  I am comfortable letting FFH handle a certain amount of my money, not knowing exactly what they are going to do with it.  I do know they will get it mostly right over time.  People do the same with Buffett.  Buffett does the same with others such as Jay Pritzer, of Rockwood chocolate fame, or Chuck Huggins at Sees.  I suspect he doesn't like dealing with people issues day to day, or sales, being an introvert.  He knows himself. 

 

Unfortunately, the only way to know oneself is through trial and error. 

[anders]

One should create a latticework of mental models that enhances cognition - munger.

There is some real power behind those words. When I started reading investing books, it gave me a good base of thinking, but after a while, the books started to integrate. So I turned to chairman letters ie brk, oaktree, fairfax and they gave me so much more. If I wanted to learn about banking, I red Dimon, if I wanted to learn about risk, I red H.marks. But the reading that really gets you going on the learning curve is company reports. And as Buffett said, read page by page. In the beginning it goes frustratingly slow, but after a while, it goes faster. Now, I start to recognize other companies mentioned in the reports and typical characteristics for that industry, thereby gaining a better understanding of their situation. And the beauty is that as you go, you get better and faster in the selection process and you notice that when the "no"s comes more frequently. I'm 32 so I still have too many good ideas but am sure it will be sustantially reduced over time.

 

Best,

[CONeal]

Would like to point out that working in different industries and understanding how things work provides alot more value then anything you read in a magazine, message board, or book.  I've done the same kind of work in real estate, banking, healthcare, and money management.  The k owlege gained regarding the operations of those industries and how businesses work has provided invaluable insight in framing a company when looking at something for a possible investment.  This is knowledge you gain on a daily basis and the best thing is they pay you while gaining this knowledge.

[alpha231616967560]

The majority of my reading would not be Financial reports.  An awful lot of time is spent getting to know something via general news, reports, this board, etc.  The financial reports come when I am deciding whether something is actually worthwhile to investigate further.  Dell being a case in point.  I have skimmed the 10k s, more recently, read one on detail 3 years ago or so, but cant bring myself to waste further time on it. 

 

A huge amount of effort has been spent by the financial press at large to understand Buffett's success. 

 

1) He loves it

2) He is smart, probably the smartest guy in the room at what he is doing.

3) Temperment - how many times through his career has he dove in and/or packed it in when most others were going the opposite way.  He also defines what he calls his CofC very well. 

4) He is comfortable not knowing (the cases here include WP, Amex, GS, GE, WFC, and on and on).  This involves understanding when the odds are in his favour.

 

There is a whole hell of alot more than just reading.

 

Good points all.

 

I read daily, usually for several hours, and while it certainly informs my investing habits, I view it as the lesser of the dual competencies of being well informed and having a suitable temperament for investing. Having a suitable temperament is more of an emotional strength than an intellectual one. Even though both are necessary, I view the latter as being Buffett's greater triumph. 

 

[mysticdrew]

Would like to point out that working in different industries and understanding how things work provides alot more value then anything you read in a magazine, message board, or book.  I've done the same kind of work in real estate, banking, healthcare, and money management.  The k owlege gained regarding the operations of those industries and how businesses work has provided invaluable insight in framing a company when looking at something for a possible investment.  This is knowledge you gain on a daily basis and the best thing is they pay you while gaining this knowledge.

 

I completely agree BUT I'm not going to change jobs/careers/industries frequently for the sake of learning to become a better investor.

[tombgrt]

Somehow I forgot to reply after reading everyone's posts some two weeks ago. I just reread the topic and found it very helpful. It gave some structure to my thoughts (concerning what I want to achieve, my expectations, etc) and provides great new insights.

 

Obviously the title of this topic was poorly chosen. Everyone serious about investing and beating the market should be passionate about it and not experience it like work. I wouldn't put in another 5 minutes if it wasn't the thing that was on my mind most of the time as some bizarre obsession. I absolutely love the intellectual and emotional challenge and the amount and variety of things to learn and master. Luckily, it seems that everyone understood what I meant by it despite my poor ability to express myself clearly in English.

 

I could reply to individual posts but feel that I have little value to add to such intelligent observations. I'm bookmarking this topic to reread it again sometime in the future. Thank you all. ;)

[Palantir]

To me, investing is work, creativity, and passion, it is not about making a lot of money, but being intrinsically interested in studying firms and economies and unraveling the threads connecting them.

[mpauls]

Look, you don't need Buffett's 50 Years of knowledge to do extremely well.  You might however need Buffett's 50 Years of Knowledge to do well with the amount of wealth created from 50 years of way higher than average compounded interest.  That said you do need at least 5-10 years of the kind of knowledge you get by locking yourself in a room and thinking deliberately about repeatable business failure and success.  And there are no shortcuts.  When you get really confident that you know something valuable and you think you are ready, you probably have a few years left before you are ready. 

 

How do you know you're there? I tell people (as a rule of thumb) you'll know you are there when the problems/questions you wish to solve/answer can not be found in any textbook or any other source i.e. when you can no longer lean on anyone else for answers-either by choice or otherwise.

[meiroy]

I would modify the premise of this thread slightly.  I would say that being a Superinvestor = WORK.  Or being an Outstanding Investor = WORK.

 

To quote Dr. Michael Burry "If you are going to be a great investor, you have to fit the style to who you are”.

 

That's the key point here, just analyzing financial statements and writing page after page of quantitative numbers (which often are based on qualitative assumptions) will not get you far other than the usual 12-14%.  There are plenty of that to be found on the net, articles the length of war and peace yet still missing that "thing", with conclusions which sometimes at best have a weak correlation to the numbers. The wheel has been invented already. The reading is more to define the road you'd like to take and for it to be effective one has to know who they are. My 0.002 cents based on just a couple of years of experience.

[giofranchi]

Obviously the title of this topic was poorly chosen. Everyone serious about investing and beating the market should be passionate about it and not experience it like work. I wouldn't put in another 5 minutes if it wasn't the thing that was on my mind most of the time as some bizarre obsession. I absolutely love the intellectual and emotional challenge and the amount and variety of things to learn and master. Luckily, it seems that everyone understood what I meant by it despite my poor ability to express myself clearly in English.

 

tombgrt,

1) You will surely be a great investor! No doubt in my mind about it!

2) Your English is perfect!  ;)

 

Cheers!

 

giofranchi