All the Fun's in Getting There

All the Fun's in Getting There

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One of my favorite hobbies is sailing—no racing, no destination, just being on the water and sailing. There are faster ways to move on the water—the technology has been out of date for centuries. Certainly there are easier ways to get from one place to another; the ratio of hard work to distance traveled is great. The point, though, is not to go anywhere in particular. I always end up just where I started. The point for me is to enjoy and make the most of the journey. All the fun, as the saying goes, has to be in getting there—because there is no "there* there.

To be a successful investor over the long term, you must also pretty much enjoy the journey. Warren Buffett and Peter Lynch long ago surpassed any reasonable level of savings required to ensure that those near and dear to them would be provided for. They clearly enjoy the challenge of investing. If you're the type that is going to lose sleep after the first market dip (or worse yet if you're going to panic out of your well-thought-out investment portions just because the market falls), then maybe a more passive approach than  the one advocated in these pages would be better suited for you. In fact, if you're not going to enjoy the "game," don't bother: there are far more productive uses for your time.

Of course, if you are able to successfully manage your own investments, there can be some side benefits. While everyone knows what money can't buy, there are obviously things that money can buy: a sense of security, a comfortable retirement, and an ability to provide for your family. Even from a religious standpoint, money doesn't have to be such a bad thing. In fact, if it's used to help others, money can be a very positive force.

Some people—include the renowned eighteenth-century economist Adam Smith in this group—believe that when you pursue your own self-interest, the whole of society benefits. In the stock market, the buying and selling of stocks creates a market for corporate equity and ultimately provides a vehicle for productive businesses to raise capital and expand. While true, this kind of thinking can only go so far. Betting keeps the cashiers employed at the racetrack, but somehow I doubt that Albert Schweitzer pursued this particular style of altruism; there may be a higher and better use for most of your time.

While to many "time is money," it's probably more universal to say that "money is time." After all, time is the currency of everyone's life. When it's spent, the game is over. One of the great benefits of having money is the ability to pursue those great accomplishments that require the gifts of being and time. In fact, you can't raise a family or make your contribution to society without these gifts. So, while money can't buy you happiness or even satisfaction, it might buy you something else. If viewed in the proper light, it can buy you time—the freedom to pursue the things that you enjoy and that give meaning to your life.

This book was meant to be viewed on many different levels. (You'll see what I mean if you take it on an elevator.) If you're an investor who already has substantial stock-market experience, hopefully it has opened up whole new areas of the investment world to you. In many ways, your work should be easier now that you know where to find those special places where the investment odds are so dramatically tilted in your favor. After reading this book, you should also have a better idea what to look for once you get there. For the novice, I hope that this book has served as a first step and as an inspiration. If the opportunities described in this book look enticing, rest assured that most of the areas covered are not beyond the grasp of the average investor. You don't have to be a genius, but you do need a basic understanding of financial statements, some common sense, and the patience necessary to gain experience.

As I've said all along, it will take some work and some effort, but this knowledge should be comforting to you. If everyone could take advantage of the investment methods described in this book just by showing up, then you probably couldn't expect to achieve extraordinary results. What will set you apart from the crowd will be the same thing that will cause most investors to fall by the wayside. The barrier to stock market success isn't exceptional brain power, unparalleled business savvy (hey, I still own sea-monkeys), or uncommon insight. The secret, now that you know where to look, is in simply doing a little extra work. When you think about it, this seems quite fair.

While it can't be said that life is always fair, in most cases and over the long term the stock market is. Despite being a card-carrying contrarian, I agree with the now widely accepted wisdom that for most people stocks are the investment vehicle of choice. As long as the economy and the individual businesses that make it up continue to grow, sooner or later the stock market will reflect this reality. That doesn't mean that in every period the stock market will provide superior investment returns. Most recently, in a stretch lasting from the late 1960s to the early 1980s, the major market averages hardly advanced at all. But in general and over the long run the stock market will accurately reflect the progress of the businesses that it represents.

Which brings us to the final benefit of the type of special-situation investing that has been the subject of this book,  While it's nice and often helpful to have a rising market, it's not required. Because your bargain opportunities are created by special corporate events—events that take place in all market environments—new bargains are constantly being created. In most cases, though, these bargains are only temporary. It might not be today or tomorrow, but if you do your homework well, the stock market will eventually recognize the inherent value that attracted you to the bargain opportunity in the first place. That's why, in the end, a disciplined approach to seeking out bargain stocks will pay off.

The idea behind this book was to let you know about a snowball sitting on top of a hill, to provide you with a map and enough rope and climbing gear so that you can reach that snowball. Your job—should you choose to accept it—is to nudge it down the hill and make it grow.

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You Can Be A Stock Market Genius,

Joel Greenblatt