If you are a golfer you know that you don’t always the skills to hit the ball perfectly.
Sometimes you miss the ball ever so slightly and the results are horrible.
But sometimes the reverse is true – you miss the shot, but your drive still turns out all right and somehow it seems as though the better you get at the game, the more it happens.
How can that be?
Of course, if you improve your skills, the better at the game you will get. That’s a given.
So then when you hit the ball badly, you have practiced enough on your swing not to make a complete mess out of the shot.
That’s all very good, but what has that got to do with investing?
Quite a lot it turns out.
If you are getting into the habit of analyzing your stocks you will eventually acquire skills.
Those skills are crucial when it comes to determine if a certain stock provides good value or not.
When you decide to either sell or buy new stock of a particular company, you will realize that you are getting better at it over time.
What in the past may may have seemed as good decision will with improved skills rank lower and vice versa.
The better you get at something the luckier you will get.