April 12, 2007
The Story of Anne Scheiber: Discipline Trumps Math Ability
Consider the remarkable case of Anne Scheiber. She represents not only the superb returns that can be enjoyed from a dedicated and systematic buy and hold strategy, but also the pluck to jump back in the game after losing everything...
She didn't do it with high-flying internet stocks. What's even better, Anne's time-tested investing style is important because it embodies one of three criteria for achieving great results.
It's a simple strategy and can be used by anyone — even small investors.
She relied on patience and sticking with her investment strategy - and above all the discipline to keep adding to her investments on a regular basis and over a long period of time.
On her modest salary as an auditor for the Internal Revenue Service (just over $3000 a year), she managed to invest $5000 over the next ten years. When she died in January 1995 at the age of 101, that modest investment had grown to $20 million. That's not a misprint. $20 million!
Her secret?
Miss Scheiber invested in stocks of companies that she knew and understood. Companies whose products she used. She loved the movies. So she invested in the production companies like Columbia pictures. She drank Coke and Pepsi and bought shares in both. She invested in the companies that made medications she took - Schering Plough and Bristol Myers Squibb. And so on.
Once can achieve the same thing by investing in a mutual fund, if you don't know what stocks to pick OR more importantly, if you're just starting your portfolio and you need diversification to blot out risk. (See: All Risk is Not Created Equal)
She invested regularly and with discipline -- making it the first priority BEFORE she had the latest Manolo's, Prada or Gucci -- through thick and thin for over forty years. Through the bear market of 1973-1974. Through the crash of 1987.
She invested in herself first so later she could have any designer she wanted!
Don't be misled or confused about the need for intricate trading strategies, greater math ability, or get rich quick 'secrets'. (There are none!)
It's about a conscious choice you're going to make today that says: "I can do this; I can own the responsibility for my financial future; and I can do it without pain. I can start right where I am today and still make an impact!"
Discipline -- a dedicated and systematic investment approach -- trumps sophisticated market knowledge. Combined with Diversification and a Longer-Term holding period, you have the only formula you need for success in investing.
Remember, the Tortoise and the Hare fable -- Slow and steady wins the race!
http://the411.typepad.com/weblog/2007/04/the_story_of_an.html
The Story of Anne Scheiber: Discipline Trumps Math Ability
Consider the remarkable case of Anne Scheiber. She represents not only the superb returns that can be enjoyed from a dedicated and systematic buy and hold strategy, but also the pluck to jump back in the game after losing everything...
She didn't do it with high-flying internet stocks. What's even better, Anne's time-tested investing style is important because it embodies one of three criteria for achieving great results.
It's a simple strategy and can be used by anyone — even small investors.
She relied on patience and sticking with her investment strategy - and above all the discipline to keep adding to her investments on a regular basis and over a long period of time.
On her modest salary as an auditor for the Internal Revenue Service (just over $3000 a year), she managed to invest $5000 over the next ten years. When she died in January 1995 at the age of 101, that modest investment had grown to $20 million. That's not a misprint. $20 million!
Her secret?
Miss Scheiber invested in stocks of companies that she knew and understood. Companies whose products she used. She loved the movies. So she invested in the production companies like Columbia pictures. She drank Coke and Pepsi and bought shares in both. She invested in the companies that made medications she took - Schering Plough and Bristol Myers Squibb. And so on.
Once can achieve the same thing by investing in a mutual fund, if you don't know what stocks to pick OR more importantly, if you're just starting your portfolio and you need diversification to blot out risk. (See: All Risk is Not Created Equal)
She invested regularly and with discipline -- making it the first priority BEFORE she had the latest Manolo's, Prada or Gucci -- through thick and thin for over forty years. Through the bear market of 1973-1974. Through the crash of 1987.
She invested in herself first so later she could have any designer she wanted!
Don't be misled or confused about the need for intricate trading strategies, greater math ability, or get rich quick 'secrets'. (There are none!)
It's about a conscious choice you're going to make today that says: "I can do this; I can own the responsibility for my financial future; and I can do it without pain. I can start right where I am today and still make an impact!"
Discipline -- a dedicated and systematic investment approach -- trumps sophisticated market knowledge. Combined with Diversification and a Longer-Term holding period, you have the only formula you need for success in investing.
Remember, the Tortoise and the Hare fable -- Slow and steady wins the race!
http://the411.typepad.com/weblog/2007/04/the_story_of_an.html
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