Investing

Don’t Strive to Be a Jack of All Trades

By Charles Sizemore  |  October 30, 2019

Hakeem Olajuwon was one of the greatest basketball players in history.

Two-time NBA Finals champion — and Finals MVP — with the Houston Rockets, two-time defensive player of the year, and the 1994 league MVP; he is rightly included among the all-time greats.

But whatever you do, don’t put a baseball in his hand.

Hakeem the Dream was invited to throw out the ceremonial first pitch in last night’s World Series game in Houston, and it wasn’t pretty. It landed in the dirt.

It was all in good fun, of course. He took it all in stride. The crowd still cheered for him. Hakeem is  a hometown hero.

But let’s just say the Houston Astros won’t be signing him as a relief pitcher any time soon.

There are parallels to investing here.

Just as Olajuwon was legend on the basketball court but a joke on the pitcher’s mound, investors that are good stock pickers might be terrible market timers. Or an options expert might be terrible at putting together a bond portfolio.

Two Real-World Examples

My friend J.C. Parets, editor of Breakout Profits, is one of the best technicians I’ve ever met.

In seconds, he can pick apart a stock chart and tell you what direction that stock is likely to go. But don’t ask him to read a balance sheet. J.C. identifies trends, but it’s not his job to dig into the details of analyzing an individual company. J.C. has no clear advantage there. So, he sticks to his charts.

Now, contrast that to my buddy and fellow Rich Investor contributor John Del Vecchio.

John is a forensic accountant. He can dissect a company’s financial statements with ruthless efficiency. Within minutes, he can tell you whether a company has been overstating its revenues and earnings. He knows where the bodies are buried in the accounting. But don’t ask him to give you precise timing. That’s not his bag. There’s no special advantage for him in this.

The Take Away from This Comparison

To start, don’t try to be a jack of all trades.

Experiment until you find an investment style that suits your skills and temperament, then stick with it so you can refine your techniques.

Keep in mind that there’s no need to pigeonhole yourself into one narrow style. But don’t constantly try to reinvent the wheel or switch from style to style based on what’s hot that moment. That’s a form of performance chasing, and it generally doesn’t end well.

Second, seek out mentors and experts in your chosen discipline.

You’re probably not going to get great results by copying another investor’s style verbatim, but you can certainly pick up a few tricks along the way.

While trying to find your niche, remember that not every discipline works well in every market.

I’m a value investor, and let me tell you, my job was a lot easier 10 years ago. The 2000s were a fantastic decade for value investors and a lousy decade for growth investors. But the 2010s have been the complete opposite… It’s been a cakewalk for growth investors and a hard market for value investors.

That’s ok though. There is a season for everything. And a good strategy will eventually come back into favor.

Speaking of, it looks like we may be in the early stages of a rotation from a growth market to a value market.

That’s fantastic news for my income newsletter Peak Income, which has a strong emphasis on value investing.

Click here to learn more about Peak Income.

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Charles Sizemore

Income and Retirement Strategist, Charles Sizemore, CFA specializes on dividend-focused portfolios and building alternative allocations by finding value opportunities outside of the mainstream stock market.

Charles is the executive editor and portfolio manager for Dent Research's premium newsletters, Peak Income and Peak Profits.

He is also a frequent guest on CNBC, Bloomberg TV, Fox Business News and Straight Talk Money Radio, and has been quoted in Barron’s Magazine, The Wall Street Journal, and The Washington Post. He is a frequent contributor to Forbes, GuruFocus, MarketWatch and InvestorPlace.com.

Charles holds a master’s degree in Finance and Accounting from the London School of Economics in the United Kingdom and a Bachelor of Business Administration in Finance with an International Emphasis from Texas Christian University in Fort Worth, Texas, where he graduated Magna Cum Laude and as a Phi Beta Kappa scholar. MORE FROM AUTHOR