Egg Caves

One of the things I enjoy is aimlessly drifting from one investing website to another. There is never a specific purpose for the journey, it's just something I like to do.

Being more of a contrarian investor I tend to buy when the markets are screaming sell and sell when the markets are screaming buy. I know it seems sort of backwards, almost like running into a burning building, and it took me a while to get my head around the concept of buying low and selling high instead of buying high and selling low.

But once I was able to finally come to grips with the buy low and sell high concept, my investing outlook changed pretty dramatically.

I came up as a tradesman, or a tradesperson in today's politically correct everything, with a non-working wife, two kids, a mortgage, and two car payments. What little extra money there was went to things like replacing a few more feet of concrete sewer line with a PVC sewer line, or trying to fix an aging asphalt driveway.

Every once in awhile, the planets would all align and I would get some sort of an unexpected windfall, usually a work related bonus. It was never enough to pay for a rarer than rare family vacation, but it always seemed to be just enough to pay for Little League baseball, or Pee-Wee football, or YMCA basketball, or the neighborhood swimming pool, or to add to what had already been put up for a class trip to Washington, D.C.

Looking back from the present to the past, those were the best of days. Looking forward from the past to the present, I'm fairly certain that I knew I was destined to live in an old car and urinate in the street.

But as they say...life happens.

I have no idea how it happened, maybe one day I was watching the kids being kids, or visiting with a neighbor, or maybe a passing bird got my attention, to be honest I have no idea, but happen it did, and it scared the hell out of me.

What I woke up to was that I wasn't providing for my family, that somehow I had missed a part of the journey, and while it wasn't too late, it was certainly late enough.

What I hadn't considered was that one day the kids would be on their own, one day there would be no house payment, or college tuition expenses, or car payments; the field trips to Washington D.C. would be over.

Taking stock (pun intended) of my savings situation and being the analytically minded person that I am, it took mere seconds to determine I had no savings, something I was hell bent for leather (cool phrase, ey Clark?) to change.

I started reading all I could read about investing. What mutual funds were and how they worked, what equities were and how to buy them, what stock analysts were, and on and on. When I got to bonds and how they worked, I simply threw up and moved on. To this day, the thought of investing money in a bond makes me want to kick an anvil.

Luckily for me what I had understood very early on in my journey through the world of investing, was that the longer my money was able to work for me the better my chances were at turning fifteen cents into a dollar.

In my case time was the enemy. What I needed was a skill that could turn back the investing clock. What I found was an art so obvious I hadn't noticed it. What I found was the art of patience, an investing skill that after more than 20 years I'm not even close to mastering.

Patience then led me to the value investing philosophy, or simply put, the science of buying a dollar for fifteen cents.

Applying both the art of patience and the science of value investing I have somehow managed to to build a retirement nest egg that survived Black Monday, the Y2k bug, the Dotcom Crash, and more importantly, my own stupidity.

Certainly I'm no Warren Buffett or Peter Lynch, or at least I don't think of myself in those terms. But of late, I've begun to wonder if perhaps I'm more like those guys than I give myself credit for.

I say that because lately it seems that almost every investing website I drift into, has something related to value investing on its index page. For the most part these sites lead off with the big gun, Warren Buffett, but with a little digging, the investing thoughts of Peter Lynch, and often the investing insights of Benjamin Graham, can usually be found.

In the case of Mr. Buffet, there are countless articles and discussion groups dedicated to analyzing almost any detail regarding Berkshire-Hathaway, Inc. (NYSE: BRK.A). Every time I see one of these articles it brings a smile to my face.

Here are the investments of the world's greatest investor being analyzed by folks that cannot possibly be investors themselves because they seem to spend all their free time analyzing Mr. Buffett's investments.

Granted the folks that do this stuff could be Berkshire-Hathaway shareholders, but I sort of doubt it. I mean how many people do you know that own shares of XYZ company that spend their time analyzing and writing about XYZ company management?

To each their own I suppose.

My point with that last couple of minutes, is to remind folks that while it may seem that you are on the outside looking in when it comes to saving for your future, with patience and an investing discipline, the hands of time can be adjusted in your favor.

Reading about the world's greatest investors and then trying to emulate what they have done, or what they are doing, will only serve to make you an "also ran" in the world of investing.

The common thread among all great investors, irregardless of their name, is that they all posses the magic quality of single mindedness. Simply put, the greatest of investors could care less what the rest of the world is doing. They are presented with an opportunity and they either take advantage of it, or they don't.

The fact that Sally Squat, cosmetologist who knows someone that knows someone that is very important, bought stock in Constantly Plugged, Inc., or that Keveen Kneejerk, stock analyst to the stars, says that Stockings by Tom is the company to own, or that some old fat guy on an obscure investing blog says he thinks Thimbles Reach the Itch would make a great long term investment, should mean absolutely nothing to the average person investor.

Instead, what should be realized is that as each investment dollar enters the market, there is a commitment being made, a commitment that reaffirms the investor's dedication to their families and to themselves.

Wax