Yesterday we had a post up highlighting some new finance blogs that we think are worth a look. Investment blogging is hard work. One need only read Josh Brown’s post up this morning answering the question: “How do you find the time to blog so much?” The fact of the matter is that blogging is part and parcel of what Josh does. He writes:
Blogging is essential to my career; before the blog, I was a jerkoff retail stockbroker. I was always smart but, man, I didn’t know a goddamn thing about anything. I only knew the stock I was pitching that particular day and how to get people to buy it. That part of my career is over. Now I must know everything there is to know about why and how markets are moving so that I can effectively manage allocation and risk for my customers.
He goes on, but be aware that if you think you can get into the blogging game and compete at a high level it will take the kind of dedication that Josh demonstrates. That kind of effort, whether it be in blogging, trading or investing is rare. The problem is that too many people today think they can get 1%-type of results with 99%-type efforts.
Joe Fahmy wrote on this topic today in regard to investment returns and expectations about them. He notes that most people simply don’t have the wherewithal to change the standards they hold or the effort required to meet them. He writes:
But what do most people do? Nothing. They simply go through the motions, live life with little enthusiasm, go to a job that they hate, stay in relationships with no passion, dislike their physical condition, but NEVER do anything about it. You’re probably thinking, great Joe, what has this got to do with trading? It has EVERYTHING to do with trading! If your mind is not straight because you’re upset with other areas of your life, how will you ever succeed as a trader? Trading involves mental toughness, and if you don’t have it, you will have a difficult time making progress as a trader.
Even then there is still some question as to just how high returns a trader or investor can generate. Investors should temper their expectations, especially the speaker who told Joe that 100% annual returns are to be expected. Therefore having some perspective on what constitutes success in investing is worthwhile. From a study at the Turnkey Analyst blog it is clear that over the very long run returns are more limited than commonly thought.
Warren Buffett–and perhaps a very select handful of others–have been able to achieve 20%+ returns over very long time periods. These individuals represent some of the richest people on the planet because of this very phenomenon.
The fact of the matter is that A-list investment blogging is hard. So is investing (and trading) in general. To think you can generate extraordinary returns from either endeavor without putting in the work is folly. The challenge is that this effort is necessary but not sufficient for success. In that regard we should recognize that Lady Luck has a say in all our results.
The A-list: newish finance blogs worth a look. (Abnormal Returns)
How do you have so much time to blog? (The Reformed Broker)
Raise your standards. (Joe Fahmy)
Mission impossible: beating the market over long periods of time. (Turnkey Analyst)
Untangling skill and luck. (Michael Mauboussin)