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I’d like to claim that skill, but alas it’s not true. I’m closer to being a saver with patience, but I have little patience with detail. If I was a civil engineer like my son, you would not want to drive over one of my bridges.
I truly admire HD writers who can delve into the nitty gritty of investing and those who understand it all. I’m still wondering what happened to the American Stock Exchange.
I don’t know the difference between a mutual fund and an ETF. I have too large a percentage of my investments in a single stock, but on the other hand it was all granted to me .. as if that matters.
In my twenties I thought I was going to be a savvy investor. I spent lunch hours in a brokers office, I invested in hot tips …and lost accordingly. I even fancied myself a chart investor plotting stock prices and trends on graph paper – not a spreadsheet- in the days before PCs. Plotting took up time and made me feel knowledgeable, but I can’t recall why.
Something Jonathan wrote years ago was the first time I thought about fees of any kind and frankly I still don’t pay much attention.
I understand the concept of diversification- I think, and unlike some of my friends, I know it is not three S&P index funds operated by different investment companies.
The stock market befuddles me to this day, about 65 years since I first dabbled unsuccessfully. Why does a stock go down when its earnings miss analysts estimates? Why do we assume the analyst was right?
More amazing to me is that a stock price rises with the expectation of higher earnings when those earnings may not be shared with the stockholders. I’m told it’s because growing earnings increase the value of the company so other people are willing to pay more because the company will be worth more … and on and on it goes. To me that’s like buying a piece of art for a $1,000,000 only to have it shredded upon sale.
I take pride in knowing I helped Warren Buffet on his way. In my youth I bought Hathaway shirts, but today if Warren looked at my investments he would drop his Dilly Bar.
After getting burned once ($25,000 gone) by investing in something I didn’t understand, I stick to index and bond funds. I do know the difference between municipal bond and other bonds, but even though I have substantial amount in municipal bond funds, I have never done a detailed analysis of tax-free versus taxable interest, I just like the sound of “tax-free” especially when it includes my state taxes. Plus that income offsets the Social Security loss from starting at FRA. 🤑 Where did you hear that before?
Should I care about the VIX? Should I fear the VIX? I read it uses the weighted average of call and put options and strike prices. Now all I need do is try and understand what each of those terms mean. Nah, is there any need?
I look at my accumulated assets – thanks to employer stock and a 401k and think, wow! Not bad for a kid who started working as the lowest paid person in a company of 15,000, albeit 65 years ago. I don’t dwell on how much more it might be if I knew what I was doing investing wise. Besides it’s too late anyway.
I’m off the help Warren again. I fancy a Turtle Pecan Cluster Blizzard.
I love this article, Dick, because my patience with detail is on a par with yours — nonexistent. The difference is that I once still fancied myself a pretty good stock investor despite that character flaw, which means it’s an absolute miracle I didn’t bankrupt myself two or three times over with my inadequately researched, quick-trigger stock buys. I look back at my year-end summaries from two decades ago and see a dozen stocks and funds I can’t even identify, let alone remember buying and selling.
I lost all interest in individual stocks quite abruptly when I got sick. I moved most of what I had into robo-investing vehicles (Wealthfront and Betterment) that my wife could easily understand and could handle comfortably after my departure. And when the departure didn’t happen, I had zero urge to resume my evil ways. Being cured also cured me of active investing. I still have one stock and one active equity fund, but the rest is in the robos.
I am an experienced investor, I analyze companies and buy stocks. If you understand corporate financials, it is not difficult, and the stock market is really very inefficient.
I’ve a long-in-the-tooth degree in business management and ran my own business for many years. During that time, I prepared all the financial statements for filing and have a good understanding of corporate balance sheets and the legal sleight of hand used to polish the numbers. But for me personally, I simply couldn’t be bothered spending my time combing through the data to stock pick. I would guess some would agree with me that a balance sheet can be more of a creative writing project than a portrait of objective truth. Index investing is plenty good enough for me.
That is certainly the case. You have $20 billion in goodwill on your balance sheet? Somehow, I don’t think creditors will take goodwill, they only want cash, unfortunately.