Investing Principle #6: Keep Score | Summary and Q&A

TL;DR

Keeping score is crucial in investing to track performance, identify areas for improvement, and learn from past predictions.

Key Insights

• 😫 Scoring is crucial in investing to measure performance, identify improvement areas, and set goals.
• 💯 The internet is an effective platform for keeping score in investing due to its memory and tracking capabilities.
• 🍉 Traditional media outlets lack accountability in investing predictions and often prioritize short-term entertainment value over long-term scoring.
• 🛟 Baseball serves as a contrasting example, with comprehensive scoring and analysis of player performance.
• 👣 Investors can track their performance by comparing the percentage change in their portfolio to the stock market's returns.
• 💯 Online platforms like Motley Fool Caps provide opportunities for investors to score their predictions and learn from them.
• 👻 Keeping score allows for continuous improvement and learning in the world of investing.

Transcript

David Gardner: #6: Keep score. Keep score. Wall Street doesn't. Keep score, the media won't. Keep score because scoring is the best way to know, A, how you're doing, and B, to get better. It's amazing to me how little scoring it's going on when it comes to the world of investing. We have pundits constantly calling what the Dow Jones Industrial Aver... Read More

Questions & Answers

Q: Why is keeping score important in investing?

Keeping score allows investors to track their performance, understand if they are beating the market, and identify areas for improvement. It provides accountability and helps in setting goals for future investments.

Q: How does the internet facilitate keeping score in investing?

The internet has a memory, making it easy to track and analyze investment performance over time. Online platforms like Motley Fool Caps allow investors to score themselves and learn from their predictions, enabling continuous improvement.

Q: Why do traditional media outlets often fail to keep score in investing?

Traditional media, like television and print, have limited memory and tend not to focus on long-term performance. They prioritize short-term predictions for entertainment value rather than tracking and evaluating past accuracy.

Q: How does baseball scoring contrast with investing?

Baseball maintains extensive statistics on players at all levels, while many top investors have no publicly available record. This stark contrast highlights the lack of scoring and learning in the world of finance.

Summary & Key Takeaways

• Wall Street and the media often fail to keep score in investing, leading to a lack of accountability for predictions and advice.

• The internet is the best platform for keeping score in investing, as it has a memory and allows for easy tracking and analysis.

• Baseball provides a stark contrast in the importance of keeping score, as even minor-league players have detailed statistics, whereas many top investors do not.