This Video was doing the rounds on Twitter recently and is merely 7.5 minutes long but in that time the wisdom that Warren Buff puts out is pretty remarkable:
I have watched this a few times (I recommend Readers do likewise) and many of the usual lines Warren trots out are repeated here but they are without doubt bang on the money and if we take these principles on board then that is going to put us in good stead. The following points from this remarkably short Interview stand out to me:
As usual I am punching the Keyboard on Sunday Evening and of course yesterday we had the Official 2018 WheelieBash at the White Hart Pub in Winkfield, near Windsor near Legoland (which is where we held it last year and most likely we will hold it there in 2019 !!). We were immensely lucky with the weather as it meant we could stay out in the Garden for pretty much the whole day and it was only much later that a smaller group of us remained to retire into the Bar area for some light Food and more Beer and Banter - too things that most definitely weren’t in short supply and I am sure the Fevertree Mixers were taken full advantage of by some particular members of the crowd.
We had 40 People attend and this was an ideal number although I had a chat with Landlord Phil and he reckons that next Year he could cope with 55 if he had to (he seemed to have a really broad smile when saying this and a clear glint in his eye - I think they had a good day behind the Bar !!). So my thinking for next Year is that I will open it up to 60 People on the List and that will probably get us near that 55 number because inevitably a few drop out on the day. Last Year we had just over 30 People so we are showing very good growth year on year !!
This is something I often seem to discuss with People and to Tweet about but I am not sure if I have ever written much about it in my Blogs. Anyway, the point I am making here is that when calculating the Performance of your Portfolio or of the Stocks within it, it is always a good idea to think in terms of Percentages - not in terms of the Pound Notes.
There are many reasons for this but the main one is that once your Portfolio gets to a particular Size (and this will vary depending on each and everyone of us and our attitudes/personalities especially with regard to Risk and of course how ‘Rich‘ we are in total), if you start to think in Pound Note terms then you can easily frighten yourself and this will lead to Fear, Panic, and other Cognitive Errors that the amount your Portfolio moves about is instilling in you.
I’m in a right old grumpy mood today - hopefully it won’t show too much in this Blog !! I have no idea why this happened, although I was unable to sleep much last night which probably caused it, but I ended up oversleeping hugely and that means I am ridiculously late today and chasing my tail which I really hate. My intent had been to get up at a reasonable time and watch some of the MotoGP Qualifying from San Marino and I had set my Alarm on my Fone (does anyone have an Alarm Clock these days?) for 8.30am but when I woke up I had the horrible sense that something wasn’t right - you know, when the light in your bedroom seems unusual (because the Sun has moved a lot !!) and you just have this sense that it is later than you hope - and of course once I look at my Fone I see it is nearly 2pm and I just can’t believe it - total double-take and my Brain really struggled to compute the disaster.
So I missed the MotoGP apart form the middle class, Moto2, which was ok but watching that and eating my Lunch (which of course was now late) and then having to ‘get myself ready’ which being a paraplegic Wheelchair User involves absurd amounts of time in the bathroom and even getting dressed is a 20 minute experience, so before I know it the day has gone and it is well into evening and I have achieved utterly sod all. I wanted to have a look through the new copy of Investors Chronicle before I started on this Blog but of course that was another hour and a half so it is now nearly 9pm and I am only just starting to type and I have yet to eat Dinner which of course will take more time (although I intend to just shove something in the Oven so it can cook whilst I carry on writing).
This is the Second Part in a Blog Series of just the pair, and you can read Part 1 here:
Averaging Down and what it means for The Diminishing Problem
As we have established, when you have a Stock in your Portfolio which is going ‘wrong’ and the Share Price is on the slide, it is a ‘Diminishing Problem’ in that as it drops the impact on your Overall Portfolio reduces.
Now the opposite effect is in play when you have a Good Stock which is going up - as it grows in Relative Size as a Proportion of your Portfolio, then the Positive Impact increases over time. These combined effects are extremely useful and another of the rare ‘Free Lunches’ that the Stockmarket gives us.
We are now down to the last few Places with 38 People saying they are coming along - so it promises to be a really fun event with lots of ‘old’ faces and a load of ‘new’ faces as well - I am really looking forward to it. It is taking place on Saturday the 15th September from about 12 Noon ish and everyone is invited - it is in a Pub near Windsor and Legoland - ‘The White Hart’ at Winkfield.
More details are on the Homepage (you need to scroll down - just like everything on my totally User Unfriendly Website !!) - please contact me if you want to come and I will add you to the List. There is no charge or anything and you just come and go when you like - committed Diehards will probably still be there at 11pm. Beginners and experienced People and all skill levels in between are coming so we should have a really good crowd.
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