Advice to the Lazy and Unmotivated

[rukawa]

When I first started trying to invest, I tried to come up with a long complicated list of things I should be doing. It involved reading a lot of newspapers, blogs, doing extensive analysis, etc. Naturally this failed miserably. And of course I spent a lot of time feeling guilty, telling myself I should do more and beating myself up.

 

I suspect there are a large number of lurkers having the same problem. I have finally succeeded in developing a habit. Here is the strategy I used:

 

1) I set a minimum goal of 15 minutes a day. This is a perfect time because its just long enough that you end up getting involved mentally but its short enough that you never have an excuse to break the habit. I almost always go beyond the 15 min.

 

2) I bet my friend $100 that if I ever broke the habit I would have to pay him. I had to pay out once for New Years.

 

3) I used the Seinfeld Calendar trick where you put an X for everyday you successfully do the habit. The objective being to not break the chain. I tracked my progress using this:

http://chaincalendar.com/

 

4) I started with a very simple, easy strategy: net-nets supplemented with some blog/forum investment cases written up by others. And I made very small bets, typically in the order of 1% or less, so that decision-making was quick

 

I guess the thing I learned is that you have to make it easy to succeed. Don't be ambitious. Be consistent. The more difficult you make your habit, the more you are setting yourself up for failure.

 

Incidentally with exercise I initially made the same mistake of doing too much and failing miserably. The thing that worked was having a very small exercise routine (4 exercises x 2 sets), done twice a week, with a friend that could be completed in <30 min.

 

 

 

 

[rishig]

When I first started trying to invest, I tried to come up with a long complicated list of things I should be doing. It involved reading a lot of newspapers, blogs, doing extensive analysis, etc. Naturally this failed miserably. And of course I spent a lot of time feeling guilty, telling myself I should do more and beating myself up.

 

I suspect there are a large number of lurkers having the same problem. I have finally succeeded in developing a habit. Here is the strategy I used:

 

1) I set a minimum goal of 15 minutes a day. This is a perfect time because its just long enough that you end up getting involved mentally but its short enough that you never have an excuse to break the habit. I almost always go beyond the 15 min.

 

2) I bet my friend $100 that if I ever broke the habit I would have to pay him. I had to pay out once for New Years.

 

3) I used the Seinfeld Calendar trick where you put an X for everyday you successfully do the habit. The objective being to not break the chain. I tracked my progress using this:

http://chaincalendar.com/

 

4) I started with a very simple, easy strategy: net-nets supplemented with some blog/forum investment cases written up by others. And I made very small bets, typically in the order of 1% or less, so that decision-making was quick

 

I guess the thing I learned is that you have to make it easy to succeed. Don't be ambitious. Be consistent. The more difficult you make your habit, the more you are setting yourself up for failure.

 

Incidentally with exercise I initially made the same mistake of doing too much and failing miserably. The thing that worked was having a very small exercise routine (4 exercises x 2 sets), done twice a week, with a friend that could be completed in <30 min.

 

A question to ask is why bother? May be you are better off putting whatever time you have into something that excites and motivates you. For the financial part, just save more than you spend and invest into a low cost index fund. You are likely to do reasonably well.

[ScottHall]

I'm lazy and unmotivated. I bought more GOOG the other day because I looked at the numbers, did a few rounds of division and decided the multiple was a good price to pay.

 

You don't have to read all this shit to do well in the market. Most of the stuff in Ks and Qs is useless.

[rukawa]

A question to ask is why bother? May be you are better off putting whatever time you have into something that excites and motivates you. For the financial part, just save more than you spend and invest into a low cost index fund. You are likely to do reasonably well.

 

That assumes you can get paid for what motivates you. I would say 90% of people can't.  Watching TV and porn motivate me.

 

Anyways there are tonnes of things people do everyday for various reasons that don't motivate them. Do you brush your teeth? Do you shovel your driveway? Do you mow your lawn? Why should investing be any different than any other chore.

 

I also strongly suspect that many brilliant investors were never that motivated by the actual nitty, gritty of investing and that they just did it for money. Benjamin Graham, for instance, appears to have stopped personally investing as soon as he retired. And he only went into it in the first place because he needed money.

 

You can do well with an index fund but you can do much better with a little effort. Net-nets aren't a very difficult strategy but the return is about double an index fund. The difference over the long term is massive.

 

I'm lazy and unmotivated. I bought more GOOG the other day because I looked at the numbers, did a few rounds of division and decided the multiple was a good price to pay.

 

You don't have to read all this shit to do well in the market. Most of the stuff in Ks and Qs is useless.

 

Don't disagree. I don't really advocate reading most of the stuff in the K's and Q's. Maybe what I wrote was misleading. I wasn't advocating reading tonnes..quite the opposite. That was exactly why I failed when I first started investing. Instead I am saying that you should have a relatively simple strategy but be consistent and develop a habit.

[LC]

I spent a few years doing the deep value/net net/etc...all the stuff the value icons have written about. Didn't motivate me.

 

Buffett gets excited learning the ins and outs of every business he comes across. I get excited playing basketball but I'm no NBA player.

 

I dumbed down my strategy. I expect to make a decent return. I'll never be disgustingly wealthy, but I'll also never spend hours reading 10k footnotes again. That's just me.

[CorpRaider]

VBR or VOE.

[SharperDingaan]

Most of us don't need additional ideas - we just need to eat our own cooking.

Selling at 70c on the $, to buy something at 60c, isn't useful. Even McDonalds pays you better for your time.

 

When starting out, you're not a PM - or a 'trader'.

Your biggest 'life lesson' is learning how to back your own convictions, and being patient enough to tolerate material interim MTM losses. The tuition has to hurt, & that learning isn't going to happen if you insist on owning 'everything'.

 

For most of us, maybe 1 night/week is more than adequate. A little more around earnings season.

Most are not 'investing' either, we're simply managing cash between events - & XYZ company is simply a reasonable opportunity.

 

SD   

 

 

 

[Jurgis]

You can do well with an index fund but you can do much better with a little effort. Net-nets aren't a very difficult strategy but the return is about double an index fund. The difference over the long term is massive.

 

:o  :o  ::)  ::)  :-X  :-\

 

Good luck.

 

Emphasis mine.

 

 

[Desert_Rat]

Most of us don't need additional ideas - we just need to eat our own cooking.

Selling at 70c on the $, to buy something at 60c, isn't useful. Even McDonalds pays you better for your time.

 

When starting out, you're not a PM - or a 'trader'.

Your biggest 'life lesson' is learning how to back your own convictions, and being patient enough to tolerate material interim MTM losses. The tuition has to hurt, & that learning isn't going to happen if you insist on owning 'everything'.

 

For most of us, maybe 1 night/week is more than adequate. A little more around earnings season.

Most are not 'investing' either, we're simply managing cash between events - & XYZ company is simply a reasonable opportunity.

 

SD

 

 

That, right there.

 

and if you're not convicted don't buy it in the first place.

 

[tede02]

I spent a few years doing the deep value/net net/etc...all the stuff the value icons have written about. Didn't motivate me.

 

Buffett gets excited learning the ins and outs of every business he comes across. I get excited playing basketball but I'm no NBA player.

 

I dumbed down my strategy. I expect to make a decent return. I'll never be disgustingly wealthy, but I'll also never spend hours reading 10k footnotes again. That's just me.

 

I have similar sentiments.  I've found I spend waaaay more time reading about investing than actually investing.  I just enjoy reading all the wisdom from Buffett, Munger, and Howard Marks in particular. 

 

When it comes to reading things like 10Ks, I always feel like I should be doing more.  But when I look at my own investment failures, none have come from missing some kind of detail buried in a financial report.  The mistakes are always big picture or psychological errors. 

[John Hjorth]

... Most of us don't need additional ideas - we just need to eat our own cooking. ...

 

SD

 

Soo right - +1.

[DocSnowball]

I've noted the fewer decisions I make the better the investing process and returns are, not to mention health and well being. Having a checklist to review before making a decision and limiting my total investments has helped the strategy of "laziness bordering on sloth". 1-2 ideas a year are enough to take up all the time at hand. And investing in areas of work that I understand  (healthcare for me) makes it fun rather than extra work

[Gregmal]

Personally Ive found concentrating in a few solid ideas within sectors you like and understand is the best approach. If you like to read and research it helps too, although at times this also makes it difficult to stay disciplined because you are constantly presenting yourself new ideas.

 

On the other hand I know people who just diversify the heck out of everything and never plan on selling. One person I know will buy 100 shares of anything fundamentally solid, up to about 10k. He's got a portfolio of like 200 companies purchased over the past 30 years plus. Some have gone to zero or been losers; some have turned into 50-100x the initial investment. This is a very long term process and approach but if you hit on a few investments with returns like that, your retirement is taken care of. I guess starting early is big too.

[Paarslaars]

I agree with SD though I see nothing wrong with owning more to reduce your risk.

No matter how convinced you are of your idea, it's never a sure thing.

 

I remember a few years back people were strongly convinced in FTP, taking large positions around the 22$-16$ range.

Same thing more recently with VRX at 200$.

[Uccmal]

After 20 plus years of doing this I am finally learning the value of simplicity.  95-98 % of companies can be tossed right away.  I dont do net-nets or graham style investing.  It just never worked for me.  I had a knack of picking the ones that never did anything. 

 

A basic checklist is all that is needed.  I dont even write it down. 

1) Is it easy to understand how the company makes its money?  If I need to write this down there is already a problem. 

2) Do they actually make money or do they hide behind an assortment of non-Gaap metrics.  GAAP or IFRS exist to protect investors.  My latest learning is to focus on EPS earnings.  (Seaspan is a mistake I have made with my eyes wide open in this regard)

3) Will they stay solvent through any downturn or cyclical component.  (PWT is an example of a mistake - two years ago - not now).  Whitecap Resources (my largest oil holding) not only managed to stay solvent but grew during the oil crash, and is back to reporting IFRS eps profits. 

 

Its amazing how often the market will toss up deals on really good companies.  I was buying Enbridge, Brookfield Renewable Power, Royal Bank, and Russel Metals around during the recent Cdn. bear market. 

 

I can read Russel Metals quarterlies and annuals in a short period of time, same with Mullen Group.  Enbridge, BEP.un, and Royal Banks are not so easy, but I dont need to know as much.  They are in regulated (protected) businesses.  They raise their dividends annually, predictably, and the EPS rises over time.  If I can snap up companies like these when they are cheap (like during the oil crash) I keep them. 

 

I know working people who have never read a balance sheet retire early by buying BCE, the big Cdn. banks, and Enbridge.  A good friend of mine operates a business in NY State.  He invests his excess cash in the markets when stocks are cheap.  He never reads a single balance sheet.  He spends so little time on it that he never even sells his losers.  They just languish in his accounts forever.  And he beats the market, easily.

 

When you get right down to it there are 30 to 40 companies over 500 m. in market cap worth looking at in Canada, and maybe a couple of hundred mid/large caps worth looking at in the US.  It is likely the same worldwide. 

 

 

 

 

 

[no_free_lunch]

Personally, I look for companies and situations where it is easy to understand the basics and you see a discrepancy in the market.  I think FNMA or AOBC meet those criteria right now.  If I can't find enough stocks that meet my criteria I just buy index funds.  Index funds are key because honestly it is hard to beat them at the best of times, if you don't have something compelling don't even try.

[Guest longinvestor]

After 20 plus years of doing this I am finally learning the value of simplicity. 95-98 % of companies can be tossed right away.  I dont do net-nets or graham style investing.  It just never worked for me.  I had a knack of picking the ones that never did anything. 

 

A basic checklist is all that is needed.  I dont even write it down. 

1) Is it easy to understand how the company makes its money? If I need to write this down there is already a problem. 

2) Do they actually make money or do they hide behind an assortment of non-Gaap metrics.  GAAP or IFRS exist to protect investors.  My latest learning is to focus on EPS earnings.  (Seaspan is a mistake I have made with my eyes wide open in this regard)

3) Will they stay solvent through any downturn or cyclical component.  (PWT is an example of a mistake - two years ago - not now).  Whitecap Resources (my largest oil holding) not only managed to stay solvent but grew during the oil crash, and is back to reporting IFRS eps profits. 

 

Its amazing how often the market will toss up deals on really good companies.  I was buying Enbridge, Brookfield Renewable Power, Royal Bank, and Russel Metals around during the recent Cdn. bear market. 

 

I can read Russel Metals quarterlies and annuals in a short period of time, same with Mullen Group.  Enbridge, BEP.un, and Royal Banks are not so easy, but I dont need to know as much.  They are in regulated (protected) businesses.  They raise their dividends annually, predictably, and the EPS rises over time.  If I can snap up companies like these when they are cheap (like during the oil crash) I keep them. 

 

I know working people who have never read a balance sheet retire early by buying BCE, the big Cdn. banks, and Enbridge.  A good friend of mine operates a business in NY State.  He invests his excess cash in the markets when stocks are cheap.  He never reads a single balance sheet.  He spends so little time on it that he never even sells his losers.  They just languish in his accounts forever.  And he beats the market, easily.

 

When you get right down to it there are 30 to 40 companies over 500 m. in market cap worth looking at in Canada, and maybe a couple of hundred mid/large caps worth looking at in the US.  It is likely the same worldwide.

 

+1, emphasis mine.

 

One could make it a tighter filter than this to net even a smaller universe of companies to pick from, like some of these,

 

- Has the named CEO shown trustworthiness for a long time. If long time>25 years, you get down to a number you can count with fingers on one hand. Even if you use 10 years or even 5 years, you will net just a few.

- Does the CEO have all their personal money in the business?

- Is cost consciousness a pervasive behavior in the business as seen from the outside?

 

Pattern recognition,

- Are earnings smooth? Like really really smooth? QoQ, YoY; Lots of analyst meetings and favorable recommendations to go with "beating projections"?

- Does the CEO own up to mistakes at all? Even the obvious one?

- Ratio of CEO / management compensation to payroll is like XXillion-to-one

- Liberal stock options? Repricing of options common?

 

It has worked for me to be lazy / unmotivated after applying these filters. Virtually all of the money I have made and expect to make has come from the two names listed on the top left side of this board. Not saying there are not a few others, but making it stringent has worked for me. Will a somewhat looser filter net a few more? Perhaps not much more.

 

Any more pattern recognition themes?

 

 

[augustabound]

He invests his excess cash in the markets when stocks are cheap.  He never reads a single balance sheet. 

 

Just curious, cheap by what metric? And by markets do you mean a TSX ETF or the big caps like you mentioned like banks, O&G, etc?

 

I like stories like those of your friend.

[Uccmal]

He invests his excess cash in the markets when stocks are cheap.  He never reads a single balance sheet. 

 

Just curious, cheap by what metric? And by markets do you mean a TSX ETF or the big caps like you mentioned like banks, O&G, etc?

 

I like stories like those of your friend.

 

He buys during a bear market rout.  He bought Canadian Banks in early 2016 because I told him they were cheaper than usual.  He bought US Banks in 2011 and has never sold.  Google, Apple, FB, etc.  He buys and forgets about it.  Being a business person he has a knack of recognizing cheap assets.  He asked me about options and I told him to forget about it, because he doesn't invest the time to follow them.  He is naturally diversified and naturally contrarian.  Nothing fancy, just household names.  His words "I guess I should sell my Apple stock but I cant be bothered". 

[Uccmal]

After 20 plus years of doing this I am finally learning the value of simplicity. 95-98 % of companies can be tossed right away.  I dont do net-nets or graham style investing.  It just never worked for me.  I had a knack of picking the ones that never did anything. 

 

A basic checklist is all that is needed.  I dont even write it down. 

1) Is it easy to understand how the company makes its money? If I need to write this down there is already a problem. 

2) Do they actually make money or do they hide behind an assortment of non-Gaap metrics.  GAAP or IFRS exist to protect investors.  My latest learning is to focus on EPS earnings.  (Seaspan is a mistake I have made with my eyes wide open in this regard)

3) Will they stay solvent through any downturn or cyclical component.  (PWT is an example of a mistake - two years ago - not now).  Whitecap Resources (my largest oil holding) not only managed to stay solvent but grew during the oil crash, and is back to reporting IFRS eps profits. 

 

Its amazing how often the market will toss up deals on really good companies.  I was buying Enbridge, Brookfield Renewable Power, Royal Bank, and Russel Metals around during the recent Cdn. bear market. 

 

I can read Russel Metals quarterlies and annuals in a short period of time, same with Mullen Group.  Enbridge, BEP.un, and Royal Banks are not so easy, but I dont need to know as much.  They are in regulated (protected) businesses.  They raise their dividends annually, predictably, and the EPS rises over time.  If I can snap up companies like these when they are cheap (like during the oil crash) I keep them. 

 

I know working people who have never read a balance sheet retire early by buying BCE, the big Cdn. banks, and Enbridge.  A good friend of mine operates a business in NY State.  He invests his excess cash in the markets when stocks are cheap.  He never reads a single balance sheet.  He spends so little time on it that he never even sells his losers.  They just languish in his accounts forever.  And he beats the market, easily.

 

When you get right down to it there are 30 to 40 companies over 500 m. in market cap worth looking at in Canada, and maybe a couple of hundred mid/large caps worth looking at in the US.  It is likely the same worldwide.

 

+1, emphasis mine.

 

One could make it a tighter filter than this to net even a smaller universe of companies to pick from, like some of these,

 

- Has the named CEO shown trustworthiness for a long time. If long time>25 years, you get down to a number you can count with fingers on one hand. Even if you use 10 years or even 5 years, you will net just a few.

- Does the CEO have all their personal money in the business?

- Is cost consciousness a pervasive behavior in the business as seen from the outside?

 

Pattern recognition,

- Are earnings smooth? Like really really smooth? QoQ, YoY; Lots of analyst meetings and favorable recommendations to go with "beating projections"?

- Does the CEO own up to mistakes at all? Even the obvious one?

- Ratio of CEO / management compensation to payroll is like XXillion-to-one

- Liberal stock options? Repricing of options common?

 

It has worked for me to be lazy / unmotivated after applying these filters. Virtually all of the money I have made and expect to make has come from the two names listed on the top left side of this board. Not saying there are not a few others, but making it stringent has worked for me. Will a somewhat looser filter net a few more? Perhaps not much more.

 

Any more pattern recognition themes?

 

Whitecap doesn't produce a paper annual report, and never pre-announces when they are going to do an earnings release. They save money on all these little things.  From that I can hope that the bigger things are being looked after. 

[SharperDingaan]

The most benefit comes from knowing the basics, and the cycles of an industry. To most of us that means you've either worked in it for some time, or its an industry that you feel strongly about. Track 2-3 quality names, if that.

 

Application makes the money; simply have a game-plan & stick with it.

For many it may be as simple as buying somewhere in the trough, selling somewhere in the peak, & holding a treasury until the next trough; rinse & repeat. For others it may be as simple as holding a treasury, & waiting for a quality 'name' to screw up; TransCanada Pipeline, BP, Barrick, FFH, etc. Lots of ways to play.

 

Do something else.

Stare at the same thing everyday, & you cant see the forest for the weeds. If you're retired - use the working day to do what those working cannot do. If you're simply bored - either start up a small business, volunteer for, or get a job talking to people. An investment decision takes 2-3 days at most, not weeks.

 

SD

 

 

 

 

 

 

   

[eclecticvalue]

+1 Sharperdingaan, I think if you're investing your own money. You can only do so much. Instead it is better you have something else to do. In addition to investing.

[John Hjorth]

... Do something else.

Stare at the same thing everyday, & you cant see the forest for the weeds. If you're retired - use the working day to do what those working cannot do. If you're simply bored - either start up a small business, volunteer for, or get a job talking to people. An investment decision takes 2-3 days at most, not weeks.

 

SD

 

At least I fixed the 2016 tax returns of the Lady of the House today. What a hazzle! We have both been laying low because of flu the last couple of weeks. At 13 per cent cash in my personal accounts, and at 16 per cent cash on overall level - before about 35 percent cash coming down to my lab from my MIL estate within a few months.

 

I don't feel pushed - at all - by the situation.

 

- - - o 0 o - - - -

 

Soon it's time to go do the spring cut of my David Austin Roses in the garden.

[chrispy]

A very interesting thread to read.  I have found this method of keeping goals simple and attainable to work very well for me in many aspects of life like exercising, reading, cooking, saving, and staying in touch with family and friends to name a few.  Allowing myself to exercise for shorter periods of time, ~30 minutes, has me exercising more often and usually for longer then 30 minutes because it is enjoyable once you get started.  On days when I am tired or too busy, 30 minutes is just fine.

 

What most people have said in this thread resonates quite well with me.  Hasn't WEB said that he knows within a few minutes if he likes an investment opportunity? He seems to agree with most of the posts in this thread.

[DooDiligence]

I have been working in the marine transportation end of oilfield services & as a result I've had a generous amount of time off (28 days on & 28 off.)

 

(BTW day rates for a 280' PSV like I've been running the past few years in the GOM are down to an unbelievable $6K/day from the low to mid $20's)

 

Over the years I've spend many hours of my off time reading K's Q's & industry pubs & websites.

 

Now that I'm officially unemployed (got laid off last week & am seriously delighted about it - no joke!) I've been giving investments short shrift.

 

I now structure my time as follows:

 

Monday through Friday

 

6am to 8am - finance

8am to 5pm - studying web development (front end for now) & designing & developing content for my 1st site

5pm to whenever - socializing

 

I find myself getting lost in web dev & completely forgetting about money (I know, crazy huh?)

 

----------

 

Saturday

 

6am to 10am - catching up on finance for the week

10am to whenever - socializing

 

----------

 

Sunday

 

6am to 10am - a mix of finance & planning for the coming weeks web dev tasks

10am to whenever - socializing

 

----------

 

I can easily get sidetracked on weekends when it's warm since most of my work gets done sitting on the back porch & my pontoon boat is just right there in the boat house staring at me so if someone stops by well...

 

(Can't think of a better use of time so I'm sticking with it!)