Wafer Thin

“The market can stay irrational longer than you can stay solvent” warned John Maynard Keynes. “When there is nothing particularly clever to do, the potential pitfall lies in insisting on being clever” adds Howard Marks. I am a big believer that the Emperor is wearing no clothes in many parts of the investment industry. The world is ambiguous, complex, and random. We seek out heroes who ooze confidence that is unwarranted. Many investors names are made or destroyed on a handful of decisions. Either these buy a decade or two (a career) because of something going well, or they have a failure carved into their souls. Extreme success may mean 60% of their decisions are right. A coin gets 50%. The margins are wafer thin. So regularly remembering that investing is more like dieting and exercising than a “how smart are you” contest is important. Everyone eats. Everyone moves. Make sure you are one of the people building towards something, rather than against someone.