As a huge sports fan, this time of year has always been one of my favorites. For the next month, college basketball has their showcase tournament where 68 teams battle it out for the NCAA championship. There was a CNBC report in 2016 that the loss of productivity in America could cost employers nearly $4 billion in lost revenue. I’ll admit that I have filled out a bracket from time to time but have never really done more than cursory research on which teams to choose. On the other hand, some of my friends and clients do all sorts of analysis. They’ll read multiple articles, watch analysts on TV, and may even watch prior games. In a sense, they are doing fundamental analysis on teams; looking at their win/loss records, roster makeup, and past performance. They also do a sort of technical analysis, looking at the odds and past tournament history; therefore, they choose a #12 seed to beat a #5 seed and so on and so on. All for a monetary prize and of course, bragging rights.
Just think if we could direct that time, effort, and energy to looking at our investment portfolios. At a basketball game, we know the difference between being a part of the team on the court and being a spectator in the stands or watching on TV. In the investing world, a real investor is someone who is educated on sound fundamental and technical principles to make wise decisions.
The question now is are you an investor or a spectator?