John, I never even understood the difference between strategy and tactics. :)
Well, as an investor with a military background, I think I can bridge that gap. <g> Very simplified, Strategy is your plan of where to go; Tactics are your choices of how to get there. (The Army uses a third term, Operations, that blends elements of the two.)
So, for an example, most of us earn money working for someone else - a strategic decision. Choosing which company and what job to do is more at the operational level. The choice of transportation to that job (bike/car/bus/train) is a daily tactical decision, as are the route and time of travel. Many of us find an optimal combination of commute tactics, and those become habits.
As a generalization, I think of Strategy as more proactive (making a plan) and Tactics as reactive (adapting to changing conditions).
In the investing world, I think of Tito's LEAP approach as a strategy; LTBH as a strategy; and day-trading as a strategy. Each is a plan to maximize return. However, choices of entry/exit points, strike prices of options, limits on orders, and such are more tactical decisions. Just as in most other things, poorly executed tactics can overcome a sound strategy, and well-executed tactics may be futile in the service of a flawed plan.
- Mitch
PS - I just watched _A Bridge Too Far_ last night with some friends. It's about the WWII allied Operation Market-Garden, and is a classic example of flawed strategy overcoming superior - often heroic - tactics. |
