“Nobody is born a great investor,” according to Warren Buffett’s sidekick Charlie Munger.
Interestingly, you could probably make the same argument about nearly any discipline.
That said, people clearly do have natural affinities for different activities such as acting, swimming and math.
For those of us who participated in sports, an outstanding coach can have a dramatic impact on people’s lives for many reasons.
Maybe the biggest one would be the ability to impart the wisdom of learning from mistakes.
In every field, making errors is part of the healthy evolution of growing.
It certainly applies to investing, probably even more so, because of the opportunity cost of capital.
By this I mean, when you have a position in X asset, and it does not perform well, you face the double penalty of the loss of the time value of the money, as well as foregoing a chance to have a better performing asset.
What’s more, because of the unpredictable nature of markets, many times a holding can poorly perform for a long time, and then suddenly massively outperform.
Consequently, selling prematurely and missing a big move can lead to lost opportunities, which are difficult to get back.
If one considers the time horizon in an investment lifetime as anywhere from 30 to 70 years, these kinds of issues make it even more critical that one constantly try to learn from their investment experiences.
One of Ben Franklin’s biggest admirers is Charlie Munger, who clearly took his words to heart, as should the rest of us who aspire to any kind of success.
Photo Credit: Perry Hall via Flickr Creative Commons