The Investment Checklist, An Epiphany, and My Revised Plans For Deliberate Practice

The Investment Checklist

I would highly recommend that any investor read this book, and I wish that I would have read it sooner.  Not only has it helped flesh out my own checklist, which I will share in the coming days, it will also help me think better, do better research, and hopefully find more companies to invest in.  I have no doubt that reading this book has helped my investment process become much better.

An Epiphany

All of my life I have been a planner, even trying to plan things out years in advance in some cases.  My plan last week that I outlined was a partial testament to that.  While reading The Investment Checklist I had an epiphany and I have also figured out what I thought that I had been missing lately.

I would also like to thank Daniel from ValueFolio in a comment on my posting My Plan for Deliberate Practice  “Great post! I really like your thoughts. Keep up the good work and have fun with it!” Bold is my emphasis.

I had become so structured lately, trying to pump out as many investment write ups as possible, that I forgot to have fun, which is what I have been missing lately.  I also went back and looked at some of previous articles, in particular my Vivendi,  Dole, Chiquita, and Fresh Del Monte write ups.  Not only are Vivendi and Dole the only companies I have bought this year, I also think that those are my best write ups as they are the most thorough, and I spent the most time researching them.

I have always noticed that my plans do not usually work out, even the short term ones, but I have never really thought about why or any way that I could change my thought process until reading chapter 8 in the Investment Checklist.  That chapter is what led to my epiphany that I should become more flexible and not try to plan everything out. I will now be “Steering the boat daily, instead of trying to plot out the course well in advance.”  Now if I find something that I think could help, something I can learn from, or a potential investment idea, I will jump into that instead of trying to finish whatever I was doing, especially if I know that what I am currently doing is not helpful.  In the past I would have finished up doing whatever I was doing just because I started it, and I always finished anything that I started. In my opinion the whole book is fantastic but chapter 8 struck something in me personally, and it helped change my entire outlook on life and investing.

My New Revised Plans For Deliberate Practice

  • Have Fun.
  • Learn Something Every Day.
  • Improve In All Aspects of Life Incrementally Every Day.
  • Become More Flexible.
  • Push Myself Every Day.
  • Become More Confident In My Abilities In All Aspects of Life.

Let me know your thoughts.

Dole update, some links, and my plans

Dole

I was planning on doing an entire write up on my thoughts on Dole now that it is up almost 50% since I wrote my articles on it and its competitors, but these two links from the Motley Fool and Seeking Alpha respectively, do a good job of talking about most of what I was going to.  Why is This Insider Buying Shares of Dole?  Top Insider Buys Filed on August 15th.

I wonder what Mr. Murdock knows or expects to happen?  Since July 24th he has bought almost 5 million additional shares and he now controls just fewer than 62% of the company.  I wonder if he is thinking about taking the company private again or if he knows or expects a spin off or asset sale to happen.

In any event, it is usually a good sign to see an insider buying this amount of stock before the company is expected to announce some kind of plan to enhance the value of the company.

In my opinion Dole is still undervalued but it has come a lot closer to my estimate of intrinsic value. The almost 50% appreciation in stock price thus far has come on almost zero news, so I am excited to see what kind of price movement happens when and if Dole announces some kind of spin off or asset sale. The following are the links to my four articles detailing Dole, Chiquita, Fresh Del Monte, and my concluding thoughts: Part 1, Part 2, Part 3, and Part 4.

Links

From Farnam Street Blog, @farnamstreet on Twitter who I would highly recommend following, they give some quotes on learning.

From Psychology Today, and tweeted by @favillapsych who I would also recommend following, they give you examples of how geniuses think and how to improve your thinking.  I especially like this portion of the article, which I think is very applicable to the investment world, quoting from the article:

GENIUSES PRODUCE.

A distinguishing characteristic of genius is immense productivity. Thomas Edison held 1,093 patents, still the record. He guaranteed productivity by giving himself and his assistants idea quotas. His own personal quota was one minor invention every 10 days and a major invention every six months. Bach wrote a cantata every week, even when he was sick or exhausted. Mozart produced more than six hundred pieces of music. Einstein is best known for his paper on relativity, but he published 248 other papers. T. S. Elliot’s numerous drafts of “The Waste Land” constitute a jumble of good and bad passages that eventually was turned into a masterpiece. In a study of 2,036 scientists throughout history, Dean Kean Simonton of the University of California, Davis found that the most respected produced not only great works, but also more “bad” ones. Out of their massive quantity of work came quality. Geniuses produce. Period.

From Deloitte, The Persistence Project and its associated articles.  Some of the links are pretty dry, and while I do not necessarily agree with everything they put forward I do think the articles contain some very good information about what makes certain companies great in comparison to others.  Quoting from the site:

Discovering the causes of superior corporate performance

Trying to understand what makes great companies great is the defining quest of popular management research. Sadly, like the quests of great literature – from the grail to the fleece – the search seems endless. Even the most famous and influential efforts at uncovering the causes of enduring success have of late been knocked off their pedestals, and often for good reason. Why should we bother even to try?

Well, if George Mallory wanted to climb Everest because it was there, then, following Thomas Berger, we determined to try our hand at the recipe for persistent superior performance precisely because it isn’t there.

To make any progress, we recognize we’ll have to try a different approach. We’ve begun with advances in statistical techniques to define a unique sample. You can read more about that in our monograph, A Random Search for Excellence.

 

My Plans

I was planning to get right into my 2 week plan that I outlined here a couple days ago, but since my internet was out yesterday I decided to start The Investment Checklist.  On top of hearing that this book is fantastic, I hope it helps me refine my checklists and also helps me figure out a way to more efficiently maximize my research and analysis time.

After I get done reading I will officially start my version of deliberate practice that I talked about the other day.