Natural tendency for corporate bloating, page-18

@madamswer

A few years ago, I analysed the performance of my investing and I discovered that I tended to make a blunder after a period of good performance. In other words, I committed the same mistake of hubris that I like to point out on others. The second discovery was the big losses in terms of dollars, percentage or speed of loss are concentrated on turnaround stories and/or asset plays.

The other side of the analysis was on where the gain came from. It turns out that most of my gains, both in terms of dollars and percentage, came from a few names with similar characteristics, namely family/founder run companies with no debt and plenty of cash, long operating history and some kind of operating moats.

Now every time I am tempted to veer off course, all I need to do is remind myself that I'm a recovering alcoholic investor. Hence it's not a good idea to hang around inside a bar, exposing myself to all of these temptations. Another good method to prevent my relapsing is to open my Excel file and look at the sea of red numbers that resulted from this kind of "adventure".