During his recent interview with Tobias, Michael Batnick of Ritholz Wealth Management discusses just how difficult it is to be an investor. Michael says that the name of the game is not to be perfect, because you’re not going to be. For the average person, it’s pretty easy to be good enough, and that’s what you should strive for. Here’s an excerpt from the interview:
One of the hardest parts about investing is that I think, like, regret is the most poisonous sort of … I don’t know what the word is, but it’s terrible for the investor psychology, because there’s always going to be something that you regret. Either you bought something and it’s not doing well, and then even probably more true is that there’s always something going up that you’re like, “Shit. I knew it.” Obviously, you didn’t know it, but you fool yourself into thinking that you knew it, whether it’s Amazon or Bitcoin, or whatever it is. There’s always something that can make you feel like a real idiot, and you know, basically all that I write about is how hard investing is, because I just think that somehow it’s still underappreciated, how difficult investing is.
Again, even just buying SPY and holding it forever, really, really hard to do. Even though you’ll do better than most people over the next 40 years, you can’t do it. Chris Sacca is, I think, from all accounts, the most successful, ran the most successful VC fund ever, had returns, I don’t know, 20,000%? Something like totally obscene, but he, like everybody else, is not perfect, and he not only missed three of the most successful IPOs, or private companies that did IPO, but he actually said no to them, and I think the companies were Dropbox, Airbnb, and Snapchat. He was on two podcasts.
He was on with Bill Simmons, and he was on with Tim Ferriss, I think, talking about how, again, he was pitched, and he had a reason for why he didn’t want to invest in al of these, and that’s one of the permanent frustrations of investing is that there’s always going to be something that either it’s an error of omission. Like Munger and Buffet regret not investing in Costco, and there’s been other stocks that they just missed, but that’s a permanent source of frustration. I think that you just have to get over that. The idea that the name of the game is not to be perfect, because you’re not going to be. It’s just, for the average person, it’s pretty easy to be good enough, and that’s what you should strive for.
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