Why Hard Work Is Not the Key to Investing
I remember how proud I was when I got my first summer job.
I had just turned 14 years old, and I was finally going to be able to make my own money.
A local restaurant hired me as a busboy, a job not many my age wanted to do.
I didn’t care.
Because every hour I was working at the restaurant, I would be making $2.33, the minimum wage in 1977. I felt like I had just won the lottery.
One summer afternoon, when business was slow and I had cleaned all the tables and mopped the floor, I pulled up a chair to take a five-minute rest.
It was then that one of the waiters walked quickly over to me and whispered in my ear, “The boss is coming. You’d better look busy or else you’re outta here.”
I jumped up from my seat and started to wipe an already clean table.
From that day on, I never took a moment's break. Instead, I always was looking for something to do.
When I started my career on Wall Street as a floor trader, I thought the key to getting ahead was always being busy and working hard.
It took me several years to come to the realization that hard work does not always equal success.
More Than Hard Work
If hard work and intellect will only get you so far, what makes for a successful investor?
After spending more than 30 years on the inside and watching world-class investors make money year after year, I learned that they all had one thing in common: temperament.
Warren Buffett said there is a tremendous correlation between approach, temperament, and success. Money can be made in the stock market if an investor:
- Is not tempted to invest every day. Great investors pick their spots and don’t invest every day the stock market is open. The key is to invest only when the odds of success are greatly in your favor.
- Has an even temperament. Don’t get overly excited when markets go your way, and don’t be depressed when they go against you. Once you do your research and make a purchase based on your analysis, let the facts prove you right — not the daily gyrations of the stock market.
- Is disciplined. Stick to an approach that is based on sound logic and has withstood the test of time. Ben Graham said that every investor “should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.”
In the face of roller coaster–type markets, the key is to stay on an even keel and stick to the game plan. Our game plan is simple: buy financially sound companies when they are trading at bargain prices.
And that’s what I’ve been sharing with my readers for almost a decade.
In my advisory service, I pull back the curtain and show you how Wall Street insiders really make money... and you’ll be shocked at how what they do is totally different from what they tell you to do.
Until next time,
Founder Editor, Park Avenue Digest