If you're like me, you do your share of homework. You study the fundamentals. You study the numbers. You separate the great growth companies from the wanna-be losers. Nothing personal. But it's about numbers and recognition.
And yet, there's always that tempting, alluring small cap that steers your attention away for a minute. Might even be a micro cap. Does that direction ever win? I'm sure it does. It has for me. But it's not a sound path for the long term. And with so many great stocks in the market today, why effin' bother with anything less? The dysfunctional side of our brains must be buried when it comes to important decisions. All decisions. Only leads to trouble in the long term. Short-term fun, long-term problems.
Repeat after me:
Buy only great growth companies. When I consider dabbling with loser stocks, walk away, go back to the great growth companies until I can't find any more of them to buy. In other words ... Shop only for the best. If that gets boring, dig a little deeper. Do my homework. There are ALWAYS great growth companies to be bought. Better to have "boring" great growth than exciting losers.
Buying a micro cap or small cap that is spinning its wheels in the mud is pretty dumb. I've done it more times than I care to admit. That would be akin to a stupid relationship worthy of the Jerry Springer show. Sure, there's a little room in any portfolio for a quality, small growth stock. But refusing to buy a Garmin or Research in Motion or Apple or Amazon or Crocs ... that's beyond dumb. That's arrogance. My goal is to lose all the arrogance, overcome all ignorance and keep it simple. Own a handful of great stocks and let them do the work.
Keeping my lists of great stocks has helped. Studying their fundamentals is a must. Love using the spreadsheet. Knowing where their prices are today (market psychology) helps in the search for a healthy entry point. That's where discipline comes in. Oh yeah, the final frontier. Still learning here. That's what I get for not joining the Army out of high school.
But it's getting better. I will not chase GRMN or RIMM here. CROX, too. I'll be patient and let the stock ride up ... and down.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment