Trading for Toddlers
Thursday, March 12, 2009 | Bob De Dea
No, this isn't a column about illicit infant trafficking. Nor does it announce a competition (as in "Dialing for Dollars") -- nobody's going to win a baby on my watch.
I was surfing the net the other day and inadvertently came across Robert Fulghum's little list as featured in his book "All I Really Need to Know I Learned in Kindergarten", and as I reread it I thought to myself, "Boy, as if I would really miss never hearing that again!" Then I thought, "Hmm, this could make a really good article for Tycoon readers ... or a really sappy one!"
I'll let you be the judge.
So without further ado, with great liberties and sincere apologies to Mr. Fulghum, I bring you
All I Really Needed to Know About How to Invest in the Stock Market I Learned in Kindergarten by yours truly.
Share everything.
Play fair.
Don't hit people.
We tend to give more credit to ourselves than we deserve and to downplay the accomplishments of others. It's easy to forget that much of what we achieve even after hard work is due to being in the right place at the right time (read "sheer luck") or to the kindnesses of others. The "self-made man" or woman may after all just be a popular myth.Play fair.
Don't hit people.
Take the cats here at Tycoon. They often get called on the rug for (Great Zeus!) selling their knowledge, their expertise, their products as ... well, products. Like they're just supposed to write articles, give tips, produce educational materials, spend thousands of hours developing a new black-box alert system or writing a comprehensive guide to the market and give them all away for free. They run a business that serves a niche for the common man and woman and is designed to help further the quest for financial insight. My guess is they could make much more money catering to a more elite crowd. But to assume they're in it only for the buck is unfair.
First off, if they weren't experts in this stuff, they wouldn't have anything to say and they'd never be able to pull off what they do. And, last time I checked, in this country the ability to pick one's self up by one's bootstraps is still considered to be a desirable means to an end. So how can any one be judged for trying to make a buck to make ends meet? Wouldn't you love to sell what you knew if you thought it were worth anything? These guys have a well-developed, well honed skill set that I, for one, covet. They haven't just stumbled into this biz, but have made their way through sweat, tears, and in some cases, blood. But that's a story for another time. (Kidding!)
Skepticism is good; it's healthy. Constructive criticism is helpful. Denigrating someone because they make an occasional mistake or because I resent their success or because I simply disagree with them is fruitless. It's a natural thing to want to do. But dat don't make it right. There's more than enough credit to go around. These guys deserve some.
Put things back where you found them.
Clean up your own mess.
Say you're sorry when you hurt somebody.
My wife. I think I'll keep her.
Warm cookies and cold milk are good for you.
Wash your hands before you eat.
Wash your hands before you eat.
Some investments just make you feel good. For some, it's alternative energy. For others, their favorite automobile maker (that's a joke, kids). For still others, it's that piano manufacturer that made the one your parents forced you to play growing up.
Make sure you're comfortable with what you invest in. Some people won't touch tobacco stocks. Some avoid pharmaceuticals. For whatever reason, let your conscience guide you in narrowing your choices. There are so many options that you can afford to be a little picky.
Flush.
Get rid of non-performing holdings. An $80 stock that's now at $20 means you've lost 75% of value. "It'll come back!" Right, but are you willing for it to go to $10 before it does? (That'd be a loss of 87.5% of value, by the way.) I've held on to things far too long. Some have gone to zero and you can bet I wished I'd sold 'em when they were at 50% of my cost.
Live a balanced life - learn some and think some and draw and paint and sing and dance and play and work every day some.
This is paramount. I try to remove emotion from the investment scene as much as possible. Instead I reserve it for the things that really matter to me: my family, my friends, my pets, and my chosen professions. I get to do things I love for a living and it's wonderful; despite the meager income, I wouldn't trade it for the world.
Take a nap every afternoon.
After you're done trading or checking your positions, treat yourself to a little reward, whether it be a nap or a walk outside or a bowl of ice cream or a few Trader Joe's Joe-Joe's (with Vanilla Bean Cream -- better than Oreos!) -- oops, I got side-tracked thinking about the cookies and milk above. Moving along ...
When you go out in the world, watch out for traffic, hold hands and stick together.
Get together with other people you know who like to invest. Talk about the things that work, the things that don't work. Share what you've learned. Chew the fat about potential picks. Place a gentleman's bet or two, if you're so inclined. (This can be extremely rewarding when you win.) And finally,
Be aware of wonder.
Franz Kafka wrote, ""Youth is happy because it has the ability to see beauty. Anyone who keeps the ability to see beauty never grows old." There are many things bigger than our financial lives, many things that deserve our attention more. Find and take the time to delight in them.
And feel free to serve up some more ideas below.
Okay, gotta go. It's recess.
If there's an educational topic that you'd like to see an article on here in The Tycoon Report, feel free to offer a suggestion.
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Bob De Dea
Chief Investment Officer
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