Just Do It
Investing isn't a difficult thing to know how to do. You could cover most of that knowledge in an afternoon ‑ some variation of buy low, sell high. That's the gist.
Doing investing ‑ that takes a bit more. There are a lot of flavors, but the act ‑ buying a share of a company or bond ‑ is the same between investors. If a billion-dollar endowment, a quantitative hedge fund, an Apple executive, a day trader, and a Reddit enthusiast all buy a share of Apple, it’s the same, even if they all have very different reasons for their decision. It looks so easy a baby could do it.
There's a parallel with finding a DIY project on Pinterest or Tik Tok, say, making a fancy cake. You see the helpful tutorial. The friendly internet doer makes it look easy. Many underestimate how difficult the cake will be to make and decorate well. The fallout from these projects spawned an entire genre of comedy ‑ Pinterest Fails.
Or maybe you watched Novak Djokavic fall to Carlos Alcaraz at Wimbledon and had some thoughts. "If Nole just played that last set a little different he would have won." Never mind that he's one of the great tennis talents of all time. I'm guessing he knew what he needed to do to win, too. The hard part is doing it and against gutsy competition.
I know how to play tennis. I don't pretend that I'm any good at it. I can follow a recipe. I couldn’t turn out convincing Tromp L’oeil patisserie or even a hedgehog cake without a lot of practice. It’s one of the lessons of investing too: don’t expect it to be easy from the jump. Don't be that baby.
Doing investing ‑ there's a lot of technical stuff like understanding financial reporting, legal regimes and administrative routines like working with brokers. But the hard part, like tennis, like cheeky animal cakes ‑ or whatever your favorite Pinterest rabbit hole is ‑ is really about behaviors and habits.
LCM frequently points out the behaviors of other investors that lead to opportunities to make good investments. Maybe sometimes these are babies, sometimes it’s just a sophisticated investor with a different M.O. Emotional decision making. What's hot? What's not? Short-term time horizons. These types of flighty investor behaviors often lead to good investment opportunities for LCM.
The other side of that is not doing the behavior that leads to opportunities for others. LCM spends a good deal of energy putting frameworks and processes in place to minimize the chances of this happening and to take advantage of the babies out there smashing "buy" or "sell."
Investing-great Howard Marks wrote my second-favorite poorly-named investing book, "The Most Important Thing," that boils down “the most important thing” in investing to 20 chapters, each covering a different most important thing. And that's the point. Investing is a lot of things. All at once. Over time. Consistently. (Here’s the memo version)
It’s not enough when investing to know what to do and when. An investor has to actually do the right things in the right moments, to have the right habits in place, to behave the right way. That will drive long-term returns.