David Driscoll is a Smart Guy…But

David Driscoll is a Smart Guy…But

I think you have to find the right approach to investing that fits into your own psychological makeup. One size may be a good fit for a lot of people, but not for everybody. I write this blog for DIY (do-it-yourself) investors at home, but I really write it for myself. I’ve always been unconventional and prefer to go my own way. I’ve read a lot about the markets both before I started to invest and after. It’s a passion for me and I find it endlessly fascinating. The markets are a dynamic, multifaceted, sometimes contradictory phenomenon that is constantly in motion and changing its shape. What follows are some basic truths I’ve come to believe in at this point in my investing life.

I believe in buying and holding positions for long periods of time. I believe in running a concentrated portfolio where you know what you own on a fundamental basis. Volatility is not risk, its noise and if you invest for the long term you can safely ignore it. Permanenetly losing money is the risk I'm concerned about. Volatility is something I believe you have to embrace as a long-term investor. It is not something to avoid (that is how most people think.) People are frightened by volatility because they are not familiar enough with what they own in their portfolio. Accept volatility and concentration. To me diversification is the bane of performance. Know what you own and why you own it. I haven’t always followed this rule and when I haven’t I have regretted it.

Running a portfolio is a solitary activity. Don’t discuss it with other people. They will only impose their own biased opinions on you and create doubt in your mind. I prefer to make my own mistakes. I can live with that. And when I do make a mistake, I try to learn from it. Leave your decision making uncontaminated and develop your own sources of information.

I’ve developed a knowledge base that has deepened and widened over time…and as it has evolved my intuitive powers have heightened and have come more and more into play. Maybe some news item might trigger a thought process that develops into an investment opportunity. Investing is more of an art form, not a science. Leave the quants and propeller-heads with their algorithms and spreadsheets...along with their under-performance.

I’ve learned to exploit the edges I think I have over my competition; both informational (utilizing  underused information) and emotional (knowing and observing my own behavior under emotional extremes).

Maybe most important of all, I try to be different because I am different. We all have hidden resources within ourselves which we can utilize once we get out of the ‘victim’ mentality...Every individual investor has to find his own truth.