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Author: jackcrow Big gold star, 5000 posts Feste Award Nominee! Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35367  
Subject: Re: Why Investors Lose Date: 4/29/2009 11:25 AM
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Unfortunately there isn't an easy solution otherwise most people would be doing it,

I think this depends on how we nuance "easy". Digging a ditch by hand isn't mentally hard but takes a fair amount of sweat equity. Solving theoretical math problems isn't physically demanding but take a great deal of brain work. Building a post and beam structure that will stand the test of time can take both.

Is there an investing equivalent of ditch digging? If we put in our sweat equity can we expect to dig out 50 basis points above the most commonly used yardsticks that measure average.

I wonder how many people believe that investing is more like advanced theoretical math than like ditch digging or believe its like building a post and beam structure. Investing isn't easy in the sense that we can't throw money at some system or some person and walk away expecting to build wealth. Quality investing takes effort on our part. We don't have to build a vehicle that can orbit the moon and return safely to earth and be reusable but we do have to do something.

What common skills do we have that can be applied to investing? Which of these if we use them with the same discipline and effort we apply to managing our households improve our odds of slowly building wealth?

If beef is too high at the market do we switch to pork or chicken? When beef does go on sale do we load up our freezer? What can of peaches are we going to buy, the cheapest, the best tasting - the cheapest best tasting we can find? Which bottle of ketchup do we buy? The one with the lowest cost per ounce? Which box or bag of cereal do we buy? Are we trying to manage merely cost per once or do we want to manage quality of calories per ounce by price? What laundry detergent do we choose? Price per once? Price per load? Quality of results?

What is our exercise routine? Daily, 3 times a week, 2 times a week. Are we training for a specific goal? Are we managing stress? Are we seeking a specific look? What is our cardio v resistance training ratio? Is working in the yard our exercise? What are our expected results for our efforts?

What route do we take to work? Why? Speed, gas savings, least amount of traffic hassle, avoiding stop lights and signs? Can we walk? Can we ride a bike? Can we carpool?

Most of the above has investing parallels. Most of the above is relatively routine and in that sense "easy"

jack
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