I’ll start this post with a quote from Howard Marks, who himself is quoting Charlie Munger. I never said I was original:
In 2011, as I was putting the finishing touches on my book The Most Important Thing, I was fortunate to have one of my occasional lunches with Charlie Munger. As it ended and I got up to go, he said something about investing that I keep going back to: “It’s not supposed to be easy. Anyone who finds it easy is stupid.” As usual, Charlie packed a great deal of wisdom into just a few words…
… what Charlie meant is this: Everyone wants to make money, and especially to find the sure thing or “silver bullet” that will allow them to do it without commensurate risk.
The talk of the town is the Globo situation. I have nothing to add on that front, so I won’t presume to try.
One thing I do like to watch, though, is investor behaviour in the wake of events. Many chalk losses up to bad luck, or attribute the blame to some external factor beyond their or the company’s control. Sometimes this is reasonable; often it is not. Others look to their process – how they are selecting securities – and then try to figure out what can be fixed to make sure they do not fall victim to the same mistake again.
This is a noble endeavour – a bit like the race driver who figures out, through repetition, that he needs to swing a little bit wider on the second corner to avoid clipping the dirt. There’s an appealing sense of progression in self improvement; a logic that, if you can just fix what you did wrong with every misstep, you’ll end up being a consistently profitable investor.