Ever notice how you can’t quite get everything you want? Most situations — including investments and trades — are a series of compromises.

Someone actually did a thoughtful analysis on the concept of "fixed scope, fixed timeframe, or fixed budget".

I like finding a broad concept, and then seeing if its applicable to investor psychology. And this one works: Its rare that something is a good value, low risk (comfort level), and has an imminent upside catalyst — you typically only get to pick two.

You can buy a well respected company inexpensively, but often, only when its hated. You can chase a hot momentum stock, buying it with good technical parameters, but ususally its pricey. 

2 out of 3.

I liked Apple and Micromuse when they was trading near cash; Had to sit in them for a while. I had my father-in-law hold his nose and buy Phillip Morris in the teens (it was hated). And the major oils (Amoco and Philips) took forever before a catalyst (take over) occurred. Even Housing stocks — still cheap, good charts — have no comfort level.

You get the idea.

You can see the complete discussions here:

Pick two (Jason Kottke)

Getting Real: Pick two – scope, timeframe, or budget   (Jason Fried)

Be sure to read the extensive and intelligent comments . . .

Category: Investing, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

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