Successful investors all have one thing in common – they compulsively measure! Many investors who have yet to reach their desired level of success are afraid to even begin measuring their performance, because they’re afraid of what they might discover!
“We all know the stress of checking your bank balance after a big weekend or stepping on the scale when trying to lose weight. For a lot of people, the anxiety of failure might be too much to handle. But to be a successful investor in the mold of Warren Buffett, you’re going to have to get over those anxieties. Careful measurement, clear-eyed analysis, and a steady hand – even when you’re down – are the only ways to succeed as an investor.
OK, time for some more Buffett-style straight talk. The difficult truth is that most people aren’t shrewd enough investors to beat the market. It was huge for Buffett to deliver returns greater than 7 percent annually. But the miracle of compound interest means that you only have to do a little better than the market to create the potential for serious financial gains.
Knowing what to measure – and then doing it properly – is the only way to know if you’re on the right track. So how do you compulsively measure? You need to monitor your investments every day, keep track of how they’re doing relative to past performance, and be patient when your chips are down. It takes energy, commitment, and honesty. In short, you’ve got to know when to hold ‘em and when to fold ‘em.
You’re not just measuring your results against past performance, though. Each year’s results should also be measured against the market. This means if the market is down, and you’re slightly less down, this still counts as a win.” This excerpt is from a Blinkist summary of “Warren Buffet’s Ground Rules” by Jeremy C. Miller.
Start measuring today by signing up for a 14-day free trial of RealNumberz!