Everybody is the best investor… On hindsight
A call out to all "investment wizards" out there
Plenty of times we talk about investments as if we are investment wizards that can look into the future and time the market accurately. If you have an investing circle, I am 99% sure that you have heard phrases like:
“We should have sold it at price X.”
“We should have bought at price Y now the price is already so high.”
“If we sold, we could have made 40% returns on that stock! Why are you so bad at investing? Isn’t it obvious that you should have sold?”
The statement above to us just don’t make any sense. It is akin to the story that I am about to tell.
Playing Monopoly with Friends
Alice, Bob and Carol plays Monopoly (board game). Alice teams up with Carol and Bob plays alone.
Ready? get set, scroll down :)
Alice rolls 2 dice and gets a 7. She decides to put a property there in box 7.
Bob rolls 2 dice and gets a 10. Bob does not pay rent to Alice. He then puts a property at 10.
Carol is angry 😠
“Hey Alice, you should have placed a property at 10. You should have known that Bob is going to roll a 10. Isn’t it obvious that Bob has rolled a 10??”
A few moments later… All of them are teleported to the starting place.
Alice rolls 2 dice and lands a 10. Pays rent to Bob.
Carol is ultra angry 😡 👿
“Oh my, Bob is such a smart Monopoly player. He knows that Alice is going to get a 10. It is so obvious. Alice thanks to you we are going to lose.”
We all probably have been a Carol before. In other words, trying to predict short term fluctuations (something that is arguably more unpredictable than rolling a dice) and perhaps complain or have regrets about our predictions.
But let’s not be a Carol :)