I remember reading an article saying the Aussie housing market outperformed shares over a particular 10 year period. And, I suppose that’s good news for property investors. The folks who invest in shares were probably not be so pleased with this announcement.
But, I’ll bet there are property investors who lost money during this 10 year run. And, I’ll bet there are share investors that made buckets of money over this same period of time.
You see, what is the key to successful investing? Is it the investment vehicle – housing or shares – or … is it the investor?
Gone Fishing
I remember sitting on the dock at Boston Bay in Port Lincoln, South Australia a long time ago. I sat there for about an hour trying to catch fish. Nothing. Yet the guy next to me was reeling them in left and right. His fish bucket was full.
I asked what bait he was using. Same bait I was using. I threw my line right next to his. He continued catching fish; me nothing.
How come he was catching fish and I wasn’t? After a while it became downright embarrassing. I could tell he felt bad for me.
In the end, I discovered just how bad he felt for me when he asked, “I’m not going to keep my fish, would you like to take them home?” I looked at him with a big smile and gladly accepted his most generous offer.
As soon as I transferred his fish into my bucket, I galloped back to our cabin. My wife opened the door, looked at the bucket full of fish and then proceeded to greet me as a conquering hero. After all, I brought home a full bucket full of fresh fish. I let the hero worship go on for about 15 minutes before I told her the truth; the guy on the dock gave me the fish! In the end, she didn’t care as long as I came home with the goods. We had a good laugh.
How come the other guy caught fish and I didn’t? Didn’t make any sense to me. Same dock, same ocean, same fishing gear, same bait, same everything, except … the fisherman. One could fish, the other couldn’t. He caught fish, I didn’t.
Life Lesson
This was a good life lesson for me. You see it’s the fisherman who catches the fish, not the equipment. The seasoned fisherman knows how to catch fish. The seasoned fisherman catches fish. No excuses. No long winded explanations. Just a bucket full of fish. Results.
Likewise, the seasoned investor knows how to invest. It may be the share market, it may be property. Doesn’t matter. What matters is the results. What matters is the investor. Does the investor know what he’s doing? If not, there’s trouble ahead. Regardless of how good or bad the market is … just like the fisherman. If he knows what he’s doing, then lots of fish in the bucket. If not, then it doesn’t matter how many fish are out there, the bucket remains empty.
Warren Buffett: Shares
For instance, take Warren Buffett. Do you think he’s making money in the share market? Do you think he had a good run over the last 10 years? Do you think his portfolio outperformed most property portfolios?
Warren knows what he’s doing. He’s a pro. His investing doesn’t rely on “the market.” His investing relys on his skill, his knowledge, his experience. Bottom line … he’s good. He’s a good investor. And, he has the results to prove it. His fish bucket is full. He’s the real deal. Not just a story teller. Not just a guy who talks on and on about “the big one that got away!”
Donald Trump: Property
How about Donald Trump? Do you think he knows a thing or two about property investing? Do you think his fish bucket is full? Do you think his property portfolio is doing ok? Do you think he made some money in property over the last 10 years?
So, shares better than property? Who knows?
And more to the point, who cares?