Making fewer, more focused decisions with your portfolio is a vastly superior strategy when compared to ill-considered rapid fire trading in and out of stocks. In July of 1997, I wrote about the benefits of a minimalist approach in life. The moral of the story being, the less you spin, the more you win. Here’s what I wrote then:
That’s it. Four letters say it all.
Thelonious Sphere Monk died on 17 February 1982, over 15 years ago. Still today, when the name Monk comes up in Jazz circles, no explanation is needed. From his early days in the San Juan Hill West 60s section of New York to Minton’s Playhouse in Harlem to Greenwich Village’s Village Vanguard, Monk’s unique approach to music and his eccentric approach to life have always engendered lively debate.
The just-released Monk/Straight, No Chaser CD (Columbia/Legacy CK64886) is a definitive Monk reissue, with 25 additional minutes of new music, including three titles restored to their original unedited length by reissue producer Orrin Keepnews, Monk’s long-term producer and the co-founder of Riverside Records. Included are two takes of Duke Ellington’s wonderful I Didn’t Know About You and, at last, the definitive and complete Straight, No Chaser. Listening to these classics as I was putting the finishing touches on the enclosed common stock Monster Master List, I was thinking how spare Monk was in the words he spoke and the notes he played. Even his name—Monk—fit the pattern.
Long-Term Profits Inversely Proportional to Trading Activity
The same approach Monk took to life and music suits us all in the investment process. Here’s what I mean. Your long-term investment success is certain to be inversely proportional to your trading activity. The less you spin, the more you will ultimately weave. Simply put, less is more.
Warren Buffett once said, “We [Buffett and Charlie Munger] continue to make more money when snoring than when active.” In Buffett’s Berkshire Hathaway portfolio, valued at over $27 billion, there are only eight primary holdings. Buffett is no spinner. Each holding is there for the long haul.
If you are looking for help with your investments, and you need guidance on a “less is more,” strategy, click here to sign up for the monthly client letter from my family run investment counsel firm, Richard C. Young & Co., Ltd. The letter is free, even for non-clients, and loaded with information on the strategies we are using to protect and nurture our clients’ portfolios.