Do you enjoy the process or just the proceeds?

[Milu]

I've been wondering about fellow investors here on the board, which ones of you really enjoy the actual process of investing and which ones just care about the proceeds? Personally I really enjoy researching companies, assessing market dynamics, evaluating management trustworthiness, making bets (often contrarian) where you are staking a position on a future view of the world that may or may not transpire. It's almost like the worlds greatest game where you are completing against the smartest people in the world to make as high a return as you can on your correct decisions and as low a loss as possible on the incorrect ones.

 

I'm somewhat addicted to the game of investing and I think even if some Genie could guarantee some high annual compound return by going 100% index fund but the only caveat is you can never research companies or make another investment again I'm not sure I would take it. I'm aware that this is totally irrational but I genuinely just like doing this for the mental stimulation, the money generated on the back end is obviously a pleasant outcome. Just something I've been thinking about a bit and wanted to see what others felt.

[LC]

The proceeds. If I made as much money from skiing or hiking or fishing or travelling smoking drinking eating etc...I would do that instead, in a heartbeat.

[frommi]

I enjoy the process of going against the crowd and outsmart other people. But there are times when i feel like an idiot. But than there are these days where the index is down 2% and your portfolio is up 5% and you run around like you are the king of pop. Would really miss these days

[dwy000]

The process.  I'd take a sub index return (to a point) to manage the funds myself. Love the research, love the analysis and seeing if it pays off.  

[Munger_Disciple]

I would say both. Proceeds are a (long term) measuring yardstick to tell if your process is right or wrong. So at a minimum proceeds (viewed over a long period) are useful as a feedback mechanism to adjust/improve one's process. 

Edited yesterday at 06:11 PM by Munger_Disciple

[Paarslaars]

I hold a large MSTR position.. so proceeds as the process is quite the rollercoaster.

 

[Milu]

24 minutes ago, LC said:

The proceeds. If I made as much money from skiing or hiking or fishing or travelling smoking drinking eating etc...I would do that instead, in a heartbeat.

Sounds like you are enjoying life either way!

[brobro777]

I don't think I'm an investor; I think I just make bets where the odds are in my favor (positive EV) and the financial markets offer great scalability, versus something like sports betting. The process of finding these bets can be interesting

 

I like the money but also it's pretty funny to get it right and then laff in the faces of people who took the other side 

 

That's good stuff haha

 

[Rainier]

Both, but it’s a difficult thing to weigh out. I really enjoy the research, following companies, and finding weird opportunities that are not yet priced in.

 

But knowing the very serious ramifications my decisions will have on my family into the future, it’s hard to say that I wouldn’t take a guaranteed 25% compounding index fund (or whatever return I think I couldn’t reliably beat). Internally, I think I just wouldn’t have a choice…like it would be irresponsible not to take risk off of the table for the people who rely on me.

 

This type of thinking has always colored my decisions about jobs as well, so it may just be a “me” thing of being too pessimistic. 

[Libs]

< I think even if some Genie could guarantee some high annual compound return by going 100% index fund but the only caveat is you can never research companies or make another investment again I'm not sure I would take it.>

 

Holy cow, you just read my soul there....I just realized I feel the same way. There's no way I can ever give up 'the game.'

[Spooky]

I also love the game - reading about investing, companies, the economy etc. It is so interesting and my favourite hobby. I've been trying to shift more money into index funds to protect against my own stupidity but will still need to keep a large part of the portfolio for individual investments. 

[73 Reds]

2 hours ago, LC said:

The proceeds. If I made as much money from skiing or hiking or fishing or travelling smoking drinking eating etc...I would do that instead, in a heartbeat.

+1  Curious - to me anyway - why so many folks like to play a game which is largely stacked against you in favor of pure passive investing, particularly if you value your time, and one in which Mr. Market ultimately decides whether you win or lose.   On the one hand you seek the independence of decision-making but on the other hand you put your complete faith in others, who manage the companies (or bets) in which you invest.  Personally the process, as opposed to the proceeds is only rewarding when I fully direct both through controlling ownership.  

Edited 23 hours ago by 73 Reds
word

[LC]

21 minutes ago, 73 Reds said:

+1  Curious - to me anyway - why so many folks like to play a game which is largely stacked against you in favor of pure passive investing, particularly if you value your time, and one in which Mr. Market ultimately decides whether you win or lose. 

 

Money - I've outperformed the SP500 by 15-25 points, at least each of the last 4 years. Further back too but I don't have the figured offhand.

It gives me something to do, and I get to help friends and family. 

 

Plus I don't like to just buy an index. I want to know what I am buying, and I want a good price. That wrests some control over the outcome away from Mr. Market.

 

And I don't think the odds are stacked against small investors. Yes 50% of all active management will underperform by definition - but think about that in terms of dollars. The US market is 60 trillion. Add in Canada, Europe, China etc.

 

Call it 100 trillion total. A guy with a few million has a lot of advantages - you've just got to be on the right side of 50 trillion. That seems achievable considering we're not trying to move billions or even hundreds of millions. 

 

 

[Lazarus]

For me, it's the process. It's socially acceptable gambling. I used to gamble quite a bit at casinos, but stopped when my kids were born. So now, individual stock picks serve that purpose. 

 

If you're doing it just for the proceeds, you are probably fooling yourself. It's super hard to beat the market. Like it or not, if you beat the market by a large % it might very well be through luck. It means you identified one of the few "stars" in the market that stick out from the rest of the stocks - you picked Tesla or Netflix early on, and then held it. Otherwise, you might, if you are highly skilled, grind out a few % above the market by picking undervalued value stocks, which is what a lot of us are trying to do here.

 

If you are simply looking to make more money, i.e., here just for the proceeds, then you are probably smarter to spend this extra COBF time on your real job or a side gig, and simply DCA into low-fee index funds in a buy and hold Bogle style.

 

 

[Blugolds]

19 minutes ago, 73 Reds said:

+1  Curious - to me anyway - why so many folks like to play a game which is largely stacked against you in favor of pure passive investing, particularly if you value your time, and one in which Mr. Market ultimately decides whether you win or lose.   On the one hand you seek the independence of decision-making but on the other hand you put your complete faith in others, who manage the companies (or bets) in which you invest.  Personally the process, as opposed to the proceeds is only rewarding when I fully direct both through controlling ownership.  

 

+1, its a means to an end for me, I enjoy it yes, just like finding a collector car stashed away in a barn someplace...but if I could be assured a 20% return in perpetuity (as one poster mentioned) without having to ever look at an investment again, I'd take it without hesitation. 

 

 

[Gregmal]

Idk investing for a living is kinda like being a treasure hunter. I enjoy the journey and the fruits of it. 

[Libs]

59 minutes ago, 73 Reds said:

+1  Curious - to me anyway - why so many folks like to play a game which is largely stacked against you in favor of pure passive investing, particularly if you value your time, and one in which Mr. Market ultimately decides whether you win or lose.   On the one hand you seek the independence of decision-making but on the other hand you put your complete faith in others, who manage the companies (or bets) in which you invest.  Personally the process, as opposed to the proceeds is only rewarding when I fully direct both through controlling ownership.  

 

I have also beaten the S & P over a very long period, 25 years now. By about 3% a year. Otherwise, I suppose my wife could logically insist we go the index route, and I'd have to go along. BTW, every so often beating the S & P is a cakewalk, if you care about valuations. 2000-20003, for example. And I suspect we are entering a similar period now.

 

 

[james22]

I enjoy the process too much.

 

 

2 hours ago, Paarslaars said:

I hold a large MSTR position.. so proceeds as the process is quite the rollercoaster.

 

Heh.

 

I can now justify it though. 

[Masterofnone]

2 hours ago, Libs said:

2000-20003, for example. And I suspect we are entering a similar period now.

 

I'm curious as to how many of this community who were in the market in 1999-2005 are feeling the same.

I know that I am. I've always been fully invested but am now at 12% cash and have mostly been sitting on my hands.

Not a declaration that the sky is falling, just a percentage play to have some funds to be opportunistic--just feels like things might be rhyming.

And this is made a little bit easier with 4.5% money market rates.

Edited 19 hours ago by Masterofnone

[Parsad]

5 hours ago, Munger_Disciple said:

I would say both. Proceeds are a (long term) measuring yardstick to tell if your process is right or wrong. So at a minimum proceeds (viewed over a long period) are useful as a feedback mechanism to adjust/improve one's process. 

 

+1!  Both for me as well.  The process gives me the proceeds to continue the process!    Cheers!

[dealraker]

I enjoy being in business.  It is a different view from most, but it is what it is.  The ups and downs are something I always predict to come so they just come and go without too much concern for me.  

[Munger_Disciple]

18 minutes ago, Parsad said:

 

+1!  Both for me as well.  The process gives me the proceeds to continue the process!    Cheers!

 

 It's a positive reinforcement feedback mechanism

[Viking]

Proceeds has been my main driver over the years. Having said that, I have always loved the process. 

 

I quit my day job at 40. The plan was to take a couple of years off and recharge my batteries and figure it out from there. But something unintended happened. Over the years, the our investments grew faster than our spending. As a result, managing our investments became my day job.

 

Today, I am thinking more about capital preservation and less about return on capital. One strategy I have implemented over the past 18 months has been to shift a significant amount of my portfolio into broad based index/ETF's. I am willing to sacrifice some proceeds and put a significant part of my portfolio on autopilot. Having said that, I will still continue with the process - and make tweaks as I see fit.

 

Bottom line, the split between proceeds / process has been an evolution for me... not something that is fixed.

 

And it ebbs and flows based on what is going on. One example: At times of great market dislocation I will get very focussed on process (understanding what is going on) with the understanding that that is when great investments can be made (spiking proceeds). Times like that are like Super Bowl Sunday for investors. 

Edited 18 hours ago by Viking

[Spekulatius]

Knowing what I own (to some extent) helps me stay invested.

[thepupil]

7 minutes ago, Spekulatius said:

Knowing what I own (to some extent) helps me stay invested.

Was going to say this. 
 

i need at least a little process to get the proceeds.

 

but I like the process too. I will admit to just wanting to read about stocks all the time. I want to make the proceeds so I can just do the process (ie not work…so I can…spend my time working).