Red Pine on Creating Value
An important principle regarding what we value most in our lives (family, health, business, finance, sport, the arts, charity, spirituality, etc.) is: Serving others first serves us best.
Most people tend to look at things they buy with an eye on the value they get for the price they pay. When prices drop, people buy more of the things they need and want – except for in the stock market. Stocks may be the only thing in the world where the lower the prices, the less people want of them.
We find that most financial advisers are more knowledgeable about planning than they are about strategy and execution. A financial plan is a must but without a first-rate strategy, success is questionable, and unless the strategy includes first-rate execution, the plan will not succeed.
Our brain is wired to perceive before it thinks – to use emotion before reason. In the investing world, that means greed, fear, etc. can play major roles in decisions especially when markets are extreme. A big increase or decrease in valuations can make us emotionally susceptible.
While offense is crucial and exciting, defense – less noticeable and less glamorous – is the foundation of successful investors as well as successful sports teams. As legendary Alabama Football Coach Bear Bryant used to say: ‘Offense sells tickets, defense wins championships.’