Connect with us

Hi, what are you looking for?

Investment Insight Daily Stock News

Common Lessons Amongst Corporate, Sports & Investment Portfolio Turnarounds!

My many decades of business, investing, and sports experience has shown me time and time again that parallel lessons in all three arenas are remarkably worthy teachers. One essential lesson today (January 2024) is to not allow yourself to become a “legend in your own mind.” Yes, you likely achieved spectacular investing results in 2023. But before you embrace the mantle of the next Warren Buffett, please remember that the S&P 500 was up over 24%. Whichever popular cliche you care to embrace, (“a rising tide lifts all boats”, perhaps?), you need to stay humble. If you don’t, the market will inevitably oblige and remind you that indeed you are not Warren Buffett.

I am prompted by these observations as I read the Wall Street Journal article (Jan 6, 2024) about football turnaround coach, Jim Harbaugh at the University of Michigan. Even business schools are studying his methods. Because successful turnarounds in different arenas have strikingly similar attributes.

Coach Harbaugh makes it sound straightforward (which of course it is not). He claims it simply takes the following:

Hard work.Make sure you improve and get better everyday.Acknowledge the improvements as they compound and reinforce winning results.

Sure, there are many obvious differences between distressed companies, discouraged sports teams and anguished investors. But my point is that regardless of your 12-0 investment season in 2023, when it comes to money management, Harbaugh’s 3 simple rules should guide and motivate you into the new year.

I’ve written pretty much the same lines to myself in my own trading journal. I had many of my biggest positions — such as ADBE, AMZN, MSFT and COST — nicely outperform the market, but I had to remember what Marty Zweig used to preach. “The trend is your friend.” In 2023, it was my best friend! I assure you that the script will be different in 2024. Don’t start to coast.

Therefore, I implore you to embrace Harbaugh’s 3 rules and rededicate yourself to our craft.

I write this to myself as much as to all of you — my investor friends. As Coach reminds us, always get back to the fundamentals. Fundamentals matter. With that in mind, I’d like to suggest you revisit the investor roadmap to success being the 10 essential stages of stock market mastery (from our book Tensile Trading). It provides the foundation for consistently profitable investing.

Here’s why these 10 stages are essential. Without an orderly roadmap to regiment and organize one’s analysis, our investment decisions can be easily tainted by the excitement and influences of the moment. Impulsive investing is poisonous. The 10 stages provide you with an understanding and justification for buying an equity, or help you decide if you should buy it at all.

The bottom line is that when you adopt the 10 stages and develop the appropriate discipline and skill set, your experience will compound. Each stage contributes to increasing the probability of achieving a profitable trade. The result being not only improvement and “a higher batting average”, but a consistency and understanding of your methodology which you can replicate over and over again.

Yes — you can achieve consistent profits and understand how you did it. 2024 here we come!

Trade well; trade with discipline!

— Gatis Roze

You May Also Like

Investment Insight Daily Economy News

Laura Wong Hon Chan is an interest rate options trader, who is currently a director at Bank of America Merrill Lynch in New York....

Investment Insight Daily Stock News

In this episode of StockCharts TV‘s The MEM Edge, Mary Ellen reviews what’s driving the markets higher and what to be on the lookout...

Investment Insight Daily Stock News

SPX Monitoring Purposes: Long SPX on 10/10/22 at 3612.39; sold 12/13/22 at 3669.91 = gain 1.59%. Monitoring Purposes GOLD: Long GDX on 10/9/20 at...

Investment Insight Daily Stock News

I don’t like it when parts of a puzzle don’t match. You just don’t get a clear picture. As participants in the markets, we...