Investing for Survival

Investing for Survival---from Capital Spectator

Extrapolating From Popular Success Stories. Here’s another area where many investors are led to believe that they’re above average, which leads to all types of problematic money decisions. The classic examples of recent decades is thinking that you could be another Warren Buffett or George Soros. After reading magazine articles and books on these famously successful money managers, it’s tempting to think, well, yeah, I could do that. After all, you’ve read their histories and studied their techniques. But this is a bit like watching the likes of Al Pacino or Jack Nicholson and deciding that the acting life is for you. Heck, look how successful they’ve been! But what’s too often ignored is that for every Pacino or Nicholson there are thousands of actors who aren't superstars. And, of course, there are many failures, a subject that typically draws little attention. It’s the same with investing: a few exceptionally successful names that draw a crowd in a sea of mediocrity or worse.