Good Investing Should Be Boring

[Buffett Jr]

Sports can be exciting. Travel can be exciting. Movies can be exciting. But your investing should be boring.

Why? Because proper investing mechanics are driven by investing systems that generate predictable outcomes. And when outcomes become predictable, the excitement is lost.

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” - George Soros

[Buffett Jr]

I used to think the stockmarket was really exciting but now I just see it as a marketplace to buy understandable companies at a good price and sit on my hands and wait.

I've actually had to take up other hobbies to keep myself entertained over the past year!

[Aaron]

I used to think the stockmarket was really exciting but now I just see it as a marketplace to buy understandable companies at a good price and sit on my hands and wait.

You are making money then. Over how many years? Making money on shares since 2009 hasn't been that great a feat although I managed to lose more than I earnt over that time.
What calculations do you make to establish a value for a company?
I would like to own boring companies like AIA and POT but they always seem too expensive.
I am thinking I will just dollar cost average into some smartshare funds as valuing companies isn't very exciting for me. I have been waiting for the next big market crash before starting but who knows if we will ever have another 2008/2009 in my lifetime.
More speculative ventures can be exciting but small speculative gold mining companies have been more depressing for me lately than exciting. Distressed bonds like Irongate back in 2009 were also exciting until realty hit and losses were suffered.

[Buffett Jr]

You are making money then. Over how many years? Making money on shares since 2009 hasn't been that great a feat although I managed to lose more than I earnt over that time.
What calculations do you make to establish a value for a company?
I would like to own boring companies like AIA and POT but they always seem too expensive.
I am thinking I will just dollar cost average into some smartshare funds as valuing companies isn't very exciting for me. I have been waiting for the next big market crash before starting but who knows if we will ever have another 2008/2009 in my lifetime.
More speculative ventures can be exciting but small speculative gold mining companies have been more depressing for me lately than exciting. Distressed bonds like Irongate back in 2009 were also exciting until realty hit and losses were suffered.

Various calculations. I essentially take into account the total equity in the business and all the future earnings then try discount that back to a present day value.

[Valuegrowth]

Yes I agree with you. All the future earnings are very important than fast earnings. Can we think anything boring now? What about some boring commodities and badly beaten down some boring commodity stocks? Commodity stocks may be the best contrarian play for 2014. I believe we can find companies with boring businesses in developed emerging and frontier markets provided we do our home work. I love anything boring. That is where we going to make attractive earnings, capital gain in the coming decade. Actually I like this area more than other areas. We find more boring businesses in food and beverages sector and manufacturing sector.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

[Snoopy]

Yes I agree with you. All the future earnings are very important than fast earnings. Can we think anything boring now? What about some boring commodities and badly beaten down some boring commodity stocks? Commodity stocks may be the best contrarian play for 2014.

Marketwinner, not sure how long you have been investing. But before the most recent 'commodity boom' commodities in general would have given you the weakest return for any sector -consistently- for over 25 years in NZD terms. So I wouldn't assume there will be any 'reversion to your perceived mean' for commodity earnings, at least in NZD terms. There may be some flow on to commodity prices as a result of quantitative easing in USD terms. But I would stake money on small commodity companies in particular being easily outperformed by NZ term deposits (yes even at current low interest rates) over the next ten years. Of course commodities will boom again. But probably half the contributors to this forum will be dead by then.

I don't see commodities as totally a lost cause though. A company like BHP has a pretty good longer term investment return record. And then there are always those companies that sell the modern equivalent of spades to goldminers.

I believe we can find companies with boring businesses in developed emerging and frontier markets provided we do our home work. I love anything boring. That is where we going to make attractive earnings, capital gain in the coming decade. Actually I like this area more than other areas. We find more boring businesses in food and beverages sector

I agree with the above in total with exception. Developing well respected food and beverage brands is not boring!

and manufacturing sector.

Be careful here! I spent some time earlier in my investment career seeking out good NZ manufacturers earning those export dollars so sorely needed by our country. But it was the investment returns over time that caused the biggest sore spot!

SNOOPY