IT Pilgrimage

A Journey From IT to Freedom

Posts Tagged ‘Investing’

Hypermiling and Investing Are Kissing Cousins

Posted by IT Pilgrim on June 5, 2008

I know the title is a bit much, but once it popped in my head I couldn’t resist it. If you take a moment, its pretty plain that the similarities are there for all to see. So here’s the gist of how they are so closely related; they are both dependent on planning.

In hypermiling you are forced to plan ahead and continually revise your plan to match road conditions. That car in front of you decides that it needs to cut off the car to his left, well, you revise. Maybe you planned on having 100 feet there, but now you have 20. You have two choices, change your plan, or run into that car (maybe he deserves it).

How is this like investing? Investing is really a lot like highway driving, or really, like tollway driving since you paid to be there. Like the tollway, you don’t have to go there, but you do either for convenience or to try to get ahead. Either way, here you are, you hopefully have some gas in your tank, and at the very least, a destination. Wouldn’t it be better if you had a route you wanted to take? Suppose you have your route defined, well what if there is construction along the way, or an accident?

Let’s jump back to your investments for a minute. Wouldn’t you be better able to achieve your goals if you had a defined plan? What if your investment strategies ran into some construction, we’ll just call it a recession? Or how about an accident, for example Enron was in your portfolio.

So here’s where investing and hypermiling intersect. They both require a well thought out plan that you will be required to revise on a regular basis. There will be bumps in the road that you will have to weather, just as your portfolio will go up and down. It takes a certain steadfastness to coast to a red light when the guy behind you is honking and weaving, just as it does to not jump out of the stock market the minute it takes a dip. In both realms, you will make bad decisions, and you will have to deal with the consequences of your actions. In the end, its really a matter of planning, patience, and most of all courage. Do you have what it takes?

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Investing and Conventional Wisdom

Posted by IT Pilgrim on May 30, 2008

Seems like everyone these days is giving investing advice. Mainly, there seems to be two or three schools of thought:

  • The Inexpensive Index Fund
  • The Mutual Fund
  • The Stock Pickers

I title these because I see them as classifications. Over time, I have begun to see how neatly these classifications seem to line up with personality types. What I wonder is, how much crossover is there? Does everyone really follow their own advice?

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