Like Mining Low Grade Ore
Most investors look for a big strike, a huge vein of ore. It’s always possible that they will find it but the odds are heavily against them.
Successful investing is more like mining for low grade ore. It’s a less exciting, methodical process that takes a long time. But with careful attention to strategy and execution, the probability of success is much higher.
Working with low grade ore isn’t as exciting and you’ll never have one of those “Eureka” moments. But neither do you have the frustration of one barren mine after another.
Investors look for the magic stock or the magic fund, a lottery ticket, that will bring them quick riches. In practice what works is a long-term, diversified portfolio with careful attention to minimizing taxes, watching costs and removing emotion from the process.
Those who react to the latest news or are constantly on the lookout for a winner fly in the face of decades of market history. While there is a logic and temptation to that approach, nearly all academic literature belies this notion.
Once in a blue moon, investment lightning strikes. Do you want to put your future on the line with those odds?