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Don’t be disappointed if you don’t win every time
Peter Lynch said:
“Six out of ten is all it takes to produce an enviable record on Wall Street”
Even the greatest investors make mistakes – all the time! Out-performing the stock market is one of the most difficult tasks anyone can take on. Sometimes you’ll get it right. Often you’ll get it wrong. To be one of the best you only need to get your success rate to six out of ten.
What do we mean by getting it right?
Changes in share price between purchase and sale is subject to a high degree of randomness. That is, all sorts of things can go wrong with the company as well as go right. As an investor you are not meant to be able to get out a crystal ball and predict these random events – that is impossible. Thus, many investments will go wrong simply because of chance.
If you have gone through a proper process of analysis and things still go wrong then you have not suddenly morphed into a speculator or incompetent – that is just the way it goes sometimes.
However, great investors are able to slightly bias their proportions of good and bad outcomes in the presence of a strong element of randomness by more insightful analysis.
Examine your companies, not the stock market
Warren Buffett said:………..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
