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The Apprentice Investor
Posted By Barry Ritholtz On April 5, 2005 @ 10:00 am In Investing,Markets,Media,Psychology | Comments Disabled
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For the novice investor, there are plenty of sites that will help them "dip their toes in the water." For the pros, more data and commentary is available than could be read in lifetime. A great void, however, stretches between the two. Its like a barbell. There is no "Sophmore" commentary between the newbie and the more sophisticated investor.
Ironically, that transition period is where investors do themselves the most damage. Just as they feel they have learned a thing or two — more confidence begets larger and more aggressive trades — they get mangled.
I’ve seen it far too many times to count.
What I have in mind is to help transition a reader from frosh to grad student; An accelerated course of the school of hard knocks — minus much of the costly pain.
There are many goals I hope to accomplish with the Apprenticed Investor, but let’s focus on three:
First, I hope to share with you the lessons, experiences and skills I have learned over the years. Not give you a fish, but teach you to fish. Hopefully, you won’t have to pay the expensive tuition these lessons originally cost me (i.e., $$$ & losses).
Second, I hope to make clear the challenges of trading/investing. Sure, you know investing is tough — but why is it so? What’s the reason that trading is so damn hard? Why do so many people — including the pros — fail to outperform? Learn the reasons for this, and you will have a much better understanding of the field of battle . . . and have a chance at superior performance, maybe even outperformance (I’ll explain the difference later).
Last, I want to provoke you into thinking. Complacency is the enemy of the investor. Get too comfortable and the markets will toast you. An enigmatic Greek philosopher named Heraclitus observed that "nothing endures but change." That’s as true today as it was 2,500 years ago in Heraclitus’ time. Failing to adapt to an ever shifting landscape is a sure path to ruin.
The first column goes up today, and its called "Expect to Be Wrong ."
Please check it out, and be sure to tell me what you think.
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