Comments

  1. Thanks Todd,
    A very clear and understandable article. Thank you for your great advice! It is interesting how you can as an individual apply these concepts to one kind of investment and then not to another. I find stocks difficult to manage on this level but real estate so much easier to handle. I just can’t help myself from buying the next great stock in the next great industry with unlimited potential only to be disappointed. Ie chip stocks and telecom late 1990s, wireless in the 2000s, the Ipad service stocks recently. I feel like a sucker falling for the same thing (product) over and over. I don’t rely on others to manage my real estate so I make sure my investment decisions are sound. Stocks are smaller investments and I am relying on others (analysts) for their advice. Once you buy the stocks they are not there to help you manage them they just recommend the next hot pick. Thank you,

    • @Steve – You’re welcome.
      I started out the same way as I explain in this post.
      Nobody is born a natural investor: it has to be learned.
      That is what I do in these articles… I try to share the benefit of my decades in the trenches learning so you don’t have to make the same mistakes.
      I’m glad you found value in the article.
      Thanks for taking the time to share your thoughts…

  2. Thanks for the article
    Very few people look at the risk/benefit. Very few know anything about the fundamentals of the company they invest in. Many dont look for dangerous upcoming issues like the european debt problem. Most do not have an entry and exit stratagy. In summary most people that get into the market, Including 401K accounts, are set up for huge loss.
    The PROCESS is very important. Maybe more important the What you invest in……
    Thanks for the article

    • @Tom – Yes, it is not an obvious thing. The media and the investment product sales industry trained investors to think a certain way – about product. Thinking in terms of process requires a greater level of sophistication so people are resistant. They just want a “good investment” so they can be done with it. People don’t want to be confronted with the idea that it is constant work and requires constant vigilance. It is a process.

  3. Thanks Todd, very good article.
    My Broker recently called me on a particular stock, which I bought but this was a one off situation. Generally we discuss, give some thought to the particular stock and then buy / not buy. It is timely article for future investing scenarios.

    • @Ted – Given your broker’s pattern it sounds like this article could invoke quite a shift. Good luck. I hope it helps… and thanks for participating in the discussion.

  4. The more I know about investment the more I realize that process and careful study/research is actually more important than product. A smart stock trader can probably take a really rotten stock and make money with it if he uses his long/short/call/put options carefully.

    Think about many of the good “products” you know about . It was hard research and development that lead to a very good product. It was the “process” of R+D that made it a good product. Process is very important.

    Good investment is a process and skill. It is not Luck. It is not gambling. It is something one needs to learn.

    • @Tom – Yes, it appears that it takes experience to get past the “product” illusion and recognize the importance of process. Hopefully this article accelerates a few people’s experience…

  5. Dear Todd,

    I have to admit, I’m a fan. That’s not something I would say about most advisors in the market. Having held a Series 7 & 66, and serving in the industry for a brief time was disillusioning. Your last piece about process, not product, was spot on. I think most advisors, like many investors (gamblers), are basically lazy, and seek immediate gratification.
    So why can they get away with simply hawking product without concern for process? Because they can. People want the “big score”, and that’s what they are sold. It’s sad, really.
    I remember one of the reasons many fail the Series 7 exam, is difficulty with the Options section. As you point out, Options are a losing game for most. But people are willing to risk money just for the thrill of explaining an Iron Condor at a cocktail party!
    You wrote a piece a while back, which asked the question, “How much is enough?” Personally, I would like to see more of this topic scattered between the pure investment news. People say they want more money, but typically can’t tell you why. More money is fine, but to what end? It’s been said that people spend more time planning a vacation than they spend planning their retirement. We need to teach people to think from the end and plan accordingly. Otherwise, why are we playing this “investment” game?
    Out country is in serious need of a change in the thought process. Once again, it’s not about the product (thought), it’s about the correct process.
    I think you are helping bring about that change. Thanks for the good work.

    • @Michael. Thank you! I appreciate your sharing your experience and insights.

  6. Thanks for a timely article. The basis of this article can be applied to any portion of your life and especially to business. Process is always important the problem is having a good one and being able to effectively apply it. In stocks you have a variety of indicators to use either indivdually or collectively. Which to use and at what levels is the real problem.

    • @Barry – Yes, you can only know the answer through testing. It is a challenging balance of science and art.

      I also agree with your insight that these truths can be applied to any part of life. That is one of the reasons I’m passionate about these subjects – it is dealing with universal truths that are much deeper than just making money.

      Thanks for bringing these points to the discussion.

  7. Now I get it. Good investment depends on three factors – risk management, strategy, and timing. Sell process, not product. Thanks for sharing these information!

  8. Point well taken, Todd.Your approach applies to the purchase of life insurance as well.It’s not about the product – it’s about the strategy.The product helps you execute the strategy.

  9. Todd it is always a pleasure to read your posts. They are the most insightful investment related articles I receive. Thanks for sharing! I look forward to you picking up your podcast series again, when your schedule permits.

  10. Timing, opportunities, and the ability to be agile are very helpful.

  11. Thanks.. looking forward to it…

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