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Strategies & Market Trends : Value Investing
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From: Graham Osborn3/25/2019 10:49:36 AM
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Lance Bredvold

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I'm not sure how many of you have watched this early interview with Buffett:

youtube.com

One thing it made me realize is that I (and most other stock market investors) have a form of gambling addiction. From what Buffett says, he checks the prices on the stocks he owns maybe a couple times a year.

If you start thinking about the implications of that for human behavior, you start realizing why Buffett is so rich and the rest of us are so poor. "A short focus is not conducive to long profits."

I've started tracking how many times I check stock prices. My guess is it will take months or years to overcome that addiction, but it is probably the single most important thing I can do to boost my returns.

When you look at the behavior of most hedge fund managers (Whitney Tilson being a classic example), you start to realize how pervasive this addiction is. In fact, there may be an inverse relationship between ability to raise capital (which involves self-promotion, which often involves taking views on the short-term price action of large-cap names) and ability to generate good long-term investment returns. I've become increasing convinced that so long as this addiction exists, an intellectual understanding of the principles of value investing will provide relatively little practical benefit.
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