The All You Can Eat Buffet And The Mass Mindset
"He that can have patience can have what he will." - Benjamin Franklin 1706-1790, American Scientist, Publisher, Diplomat
We once wrote something along the same lines about a year ago but we are going to attempt to look at things more thoroughly this time.
We spent the last few days analysing how people go about filling their plates at all you can eat food buffets. First of all the worst food is served at these all you can eat buffets; the concept is simple offer lots of quantity but very little quality. The concept works marvellously everyone thinks they are getting a bargain while in reality they are causing havoc to their digestive systems. To make matters worse instead of trying to locate the gems in this arena of almost pure garbage, everyone goes for the food that will cause the most damage to their bodies. If one examines the buffet with patience you will find that the salad bar is one of the few places where you can find something really tasty and healthy at the same time. Pay a little more attention and you will find a cook grilling sirloin steaks and a small but decent selection of cooked vegetables. As we stated before over 90% of the individuals simply went for the pure garbage junk food, which consisted of the following; hamburgers, fried chicken, French fries, pizza, fried chicken wings, fried chicken nuggets etc.
Now let's stop here for a minute you have several options open.
1) For about the same price you could go out and eat a simple meal instead of buying the concept of "hey we can go back and fill our plates as many times as we want" (quality is sacrificed for quantity)
2) You have the option of selecting only the top items from the buffet and dumping the rest. Example some grilled steak, salad, vegetables and then top it off with fresh fruits.
3) You could also have the best of both worlds eat a little junk food but make sure you compensate for this with equal if not bigger portions of healthy food. As long as this is done in moderation the damage can be controlled.
Now let's try to see how this is related to investing. In the same way most people try to load their plates with as much food as they can (mostly with junk food) in the hopes of getting a bang for their buck (in reality the only bang they are getting is a whack on the head and kick to their digestive systems); individuals enter the market with the idea of spreading their money in several different sectors (this done by listening to CNBC, CNN, various popular newspapers and magazines). They invest their money without even taking the time to look around and usually end up buying the worst stocks in the worst sectors at precisely the wrong time. Even worse they hire some money manager to go on a stock buffet trip; 50% of the time these chaps cause even more damage then the same individuals that hire them.
It is for this reason that we have always taken the stance that investing is way of life and that ones health is the most important aspect of investing. If one has no health one has nothing so why even bother trying to make more money. There are very few good traders in the real sense of the word. A real investor is able to gauge every aspect of his life and applies the principles he has learned in the market to them.
So let's break down things a bit and try to relate them to the all you can eat buffet scenario
Scour the buffet table for the best food and ignore the other food that looks good but that are extremely bad for you. Now applying this to investing, scour the market place for good plays, avoid those stocks that appear to look good and that are being hyped by the media. Buy things that most are ignoring; eat the food that 90% of the patrons are ignoring and walking by.
If you just walk in and don't look around like everyone else you will let your gut and your taste buds do the talking and let your mind fall asleep, before you know it your plate is filled with some of the most harmful food you can eat. On the same token if you walk into the market without doing your some of your own research or finding a reputable company to help you (this is getting harder and harder to find these days but even if and when you find one you should still do some research on your own) then 90% of the time you are going to end up losing your money.
Once you find something that works stick to it no matter how hard it might appear. Applying this concept to the buffet table, don't eat healthy one day and then load your body with garbage for the rest of the week.
Once again the secret programmed desire to lose syndrome is revealed in full force. The masses are set on a self-destruct mode, they seem to thrive on misery and pain or they know no better; the outcome either way is the same. Even when it comes to what they put into their bodies they take very little time to examine what it is they are eating and what the consequences could be. The concept of living for the moment is all that matters. If you have very little respect for your body (self) how you can have any respect for your money? If you are crippled with cancer, severe diabetes, or suffer from stroke etc you can't work anymore and therefore you cannot earn anymore. How could you have any respect for the money you have if you are so willing and ready to destroy your health and possibly cripple your body (which in reality is your cash cow).
Mass psychology is a wonderful field and if you pay close attention to what people are doing around you it can help you avoid many pitfalls in life. Some of the best places to gather such data are from your close family and friends; hey no one ever said life was fair so if the data is available then use it.
"All things come to him who waits -- provided he knows what he is waiting for." - Woodrow T. Wilson 1856-1924, Twenty-eighth President of the USA