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Bias For Clarity

Bias for action. Gets things done. Go-getter. Traits companies big and small look for. And for good reason, you're being hired to do things! However, action is a secondary step that often overshadows the primary step, direction.   Clear direction is the foundation that enables our actions to takeoff. Without it, we're stuck in the mud.  Striving for clarity is an underrated skill. Having the courage to ask ( seemingly ) obvious questions, and to check in, making sure we're all on the same page. "O bvious " questions are a low risk, high reward way to add value. At worst, you'll add confidence to our actions. At best, you discover a misalignment that saves us from a dead-end.  The more people, the more clear we need to be. The bigger the initiative, the bigger the risk of reaching the finish line, only to realize expectations were off.  Success is always uncertain. But we can be certain about what we want and what everyone's job is. Things that can be clea

10 Days: How Missing the Best Market Days Destroys Returns

"Only liars manage to always be out during bad times and in during good times." - Bernard Baruch 10 days . That's all you need to miss for your investments to be cut in half. Markets are wildly unpredictable. They can swing 15% in either direction on any given day . Market timers try to be invested in the good days and be absent for the bad days ( like a terrible friend ). This strategy sounds simple enough but is practically impossible to implement. Why? Because no one can predict the future. Timing the market is hard but mistiming the market is easy. There's only a handful of great market days and they drive the majority of returns. Not being invested on these days severely handicaps your performance. J.P Morgan's  2019 Guide to Retirement  analyzed the 20-year return of the S&P 500 from Jan 4 1999 - Dec 31 2018. Annualized returns were 5.62% . If an investor invested $10K and had the discipline to not tinker with their investments, their portfo

Lottery Losers - The Perils of Envy

$10K is the median household income worldwide, the US does much better with $40K annually. Lawyers earn over $150K a year, while doctors earn over $250K. CEOs average  $15M , while Lebron James makes more than double without even counting endorsements. Moral of the story, wealth is relative. It's not hard to find someone who has more. It's natural to be envious of those wealthier, but envy is useless. It's bad for decision making and just plain bad for life. “Envy is a really stupid sin because it's the only one you could never possibly have any fun at." - Charlie Munger It's prevalent in investing. Everyone is comparing their performance to everyone else's. Seeing others get stronger returns is understandably difficult. It's even more difficult when you are financially more responsible than those who outperform you. You save diligently and invest regularly into a risk-appropriate portfolio, but your co-worker YOLO'd into Telsa in 2010,

The Beauty of Boring, Successful Investing is Dull

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” -  George Soros Hollywood makes investing out to be an action-packed affair. Traders screaming on the phone, papers flying, underdog geniuses crunching numbers to uncover million dollar insights. Now some of this does happen, but it's very rare. Stock picking itself is seldom successful, over 80% of active fund managers fail to beat their benchmark. Index investing - where you're trying to be the market instead of trying to beat the market , has been shown time and time again to be the most reliable and sensible way to invest. Of course, no one would watch a movie about a group of do-it-yourself investors buying ETFs and slowly building up a comfortable retirement.  Successful investing is dull, this is something investors should accept. It's simply having a plan, saving your money and investing regularly in a risk-appropriate portfolio. It'