Usain Bolt vs. Bobbi Gibb

If I asked you to bet on a race between Usain Bolt and Bobbi Gibb, you would probably first ask who is Bobbi Gibb–first woman to run the Boston Marathon, and secondly, what distance is the race?

100m, 200m, 400m, 1 mile, Marathon?

In the investing world, the distances also vary considerably: 1 day, 1 week, 1 month, 3 months, 1 year, 3 years, etc…

It’s like the participants are playing by a different set of rules because in fact they are.  Some talk in milliseconds (see Flash Boys) some in days, some in what is going to happen in the next quarter or 6 months?

If you know where you talents are, you should play in the game that suits you best.  I know a few investment managers who still request that the companies send these managers paper copies of their annual reports.  These people aren’t worried about what happens in the next day.  I rarely read a 10Q–the business shouldn’t change much from quarter to quarter (I know of one company that shifted from identity theft to electronic dog collars within a 6 month period–not a current or future investment).

If you are Michael Jordan, stick to basketball, we all know how baseball worked out for you.

 

More to Explore

Returns for Great vs. Bad Businesses

Munger and The Cattle Rancher

Munger’s ability to find great businesses is directly related to his ability to consistently discard bad businesses. He is excellent at inverting, and discarding the bad businesses as quickly as possible.

The Abominable No-Man and Bad Management

Some investors think a business is good, but know that management is bad.  These investors justify the investment based on the idea that the great price of the business is worth the bad management. This is akin to marrying a supermodel who is going to yell at you all day.  Whatever pleasure your eyes may derive from the marriage, your ears will endure a greater amount of pain in the long run. The pocketbooks of those partnering with bad management are likely to see a similar 50%+ decline in their net worth.

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