I spent most of my formative years playing sports – mainly basketball. My own biased belief is athletes have a unique view toward winning and losing because they deal with it earlier in life and more often than most people. It may or may not be true. I have no idea. It’s just my biased experience from sitting in the stands after spending most of my youth on the court.
The early lessons from sports are hard work and team work pay off. As the kids move up the ranks, they learn how to handle winning, losing, and fixing mistakes.
I’ve noticed excuses and blame get tossed around early and often from the stands. Players don’t have that luxury if they want to get better. Sure, it’s nice to blow off some steam and pass the blame. Then practice starts.
If they’re lucky enough to have a good coach, they learn early on that excuses don’t help their game. A good coach refocuses that energy on fundamentals and fixing mistakes.
I bring this up because many lessons from sports mirror investing – not making excuses is one of them. Investors who make excuses are doomed to repeat the same mistakes over and over.
On that note, I want to point out an update to a bet Buffett made back in 2008:
Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.
You can read more about the bet from the source.
Seven years later, his opponent offered an update, with
excuses an explanation why they’re losing. I’ll point out the obvious reason – low cost wins – and let you read the rest.
Surprisingly, Buffett’s own Berkshire Hathaway underperformed the S&P 500 from ’08 to ’14 too, 58.1% vs. 63.5%.
- A Checklist for Foreign-Stock Fund Investors – Morningstar
- Cry Me a River that Leads to Omaha – M. Santoli
- The Science of Improving Your Performance at Almost Anything – Time
- Comparisons With Others Can Obscure Our Own Goals – C. Richards
- The Extraordinary Story of America’s Most Successful Industry – M. Housel
- Simple, Bedrock Rules on Personal Finance – WSJ
- Literacy, Numeracy And Ecolacy – Filters Against Folly In Investing – Grahamites
- “The Wisdom of Insecurity” in the Stock Market – J. Felder
- Explaining The Low Vol Anomaly – L. Swedroe
- Why More People Should Invest in Target-Date Funds – MarketWatch