You Are Playing Hockey against Wayne Gretzky
Thursday, January 20, 2011 at 2:07PMIf you absolutely need to win a sports match, you must play it against a team you can beat hands down. Investors were offered such an opportunity in 2008. With a little bit of homework, you could have found securities that offered five to ten times the return on your investment with very little risk. It felt like playing hockey against a bunch of two-year-olds.
In 2011, the situation has reversed. Equity valuations are fair at best and stretched in some sectors. Now you are playing hockey against a professional. It is a game most people can’t win, no matter what the return merchants are saying. Were they pounding the “buy, buy, buy” table in 2008? No, they weren’t.
The worst part about this metaphor is that as investors, we don’t fully grasp whom we are playing the game against. My guess though is that right now, we are playing hockey against Wayne Gretzky.
Good luck with your game!
Michael Bigger. Follow me on Twitter and StockTwits.
Reader Comments (2)
I learnt investing in the middle of 2009, slightly late, but still manage to gain substantial returns beating inflation and interest rates and the market.
I am taking some advice from your book "In Praise of Speculation" I am saving cash for the next cycle.
and it will come...If not a full fledge bear market, a major sell off in a security of a company you have wanted to own forever,