Sunday, August 14, 2011

The Wisdom of Haggis

Over on Mark Cuban's site, an article on the lie of Asset Diversification.
Underneath, there are a couple comments on how wrong he is, and some good arguments why. What we're all missing is one of my favorite quotes:

As a wise old Scotsman once said, "If we all liked the same thing, there'd be a shortage of haggis."
I like this quote for two reasons. One is - it's right. Two is a reminder that I probably won't be picking 'what we all like', so if I want to keep my choices, I'd better honor theirs - for any value of 'they'...

The point is, we're all different. I don't use Asset Allocation, or for that matter Dollar Cost Averaging. They're for people who don't want to think about their investments much. Set up a plan, put money in regularly, give it forty years, and they're rich. Or probably a millionaire at least. Meanwhile, they work their job and focus on other things.

However, I treat my investing like a job. Hours of research, follow through, tracking, and treat each trade as a special project. Asset Allocation is dilution to me, and DCA doesn't mean anything because I don't own the same stocks in a month. Mutual Funds are slow and pay too much to the fund manager - and managing my money is my job!

But I'm not saying the other way is wrong and my way is right, just right for me. Mr. Cuban is closer to the markets than most of us, and probably hires people to help him with his investing. Mr. Buffett has his way. I have mine, and you have yours. If you haven't found 'your way' yet, it's there. And look closely at anyone who is going to tell you how to invest your money. If you don't have a plan for your money, someone else does.

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