INVEST FOR THE WHOLE GAME

Most lifelong investors have had the opportunity to hit a home run or two. Most have also experienced a few strikeouts in their investing career. Sometimes the timing is just right, and sometimes it can be really bad. As is human nature, I suspect most talk more about their home runs than their strikeouts. Yet, in my experience neither one, though dramatic at the time, determines the long term success or failure of a portfolio.
 
I was reminded of this in a situation this week that had nothing to do with investing, but the lesson was the same. Launa and I were in San Clemente, California and decided to meet up with some friends at one of our favorite quickserve Italian restaurants. Our friends were regular customers and had introduced us to the place a couple of years ago. We then became regular customers ourselves, stopping in many times during our frequent business trips to the area.
 
After meeting up with our friends, we visited for a bit while waiting to place our order. When we reached the front of the line the cashier told us they would not be able to serve us because a large phone order had just come in and they would need to spend at least an hour filling that order first. A moment later the owner appeared and confirmed what we had been told – that due to the phone order, they would not be able to serve us for at least an hour.
 
We were confused as to why he would not serve customers standing at his counter because of a phone order that had just been placed. Though we were there first, we were being pushed to the back of the line. The owner explained that though he sympathized with our situation, the phone order was worth over $500 so as a businessman he was giving it priority. To our amazement he actually said to us, “Don’t take it personal, it’s just business.” As one who makes his living analyzing business models I found this man’s treatment of us, and several other customers standing with us, quite unbelievable. For a mere $500 he was willing to destroy several long term client relationships that were worth far more. In disbelief we left, and promptly found our new favorite Italian restaurant.
 
People, like this business owner, often make very poor financial decisions when faced with the prospect of a possible home run. He may have gotten a big hit that day, but it came at the expense of a lifetime of profitable singles that he will miss out on.
 
Investors as well can get caught up in the excitement of swinging for the fences. In so doing they often overlook that the real driver of most successful investment portfolios are those consistent investments that plod along, day after day, quietly building a lifetime of true wealth. Remember, to succeed in business and in investing focus on winning the game, not just on getting a big hit now and then.