For those dangling on my cycle-line wondering if I ever managed to win a race with my new bike - I did! The highlight of winter was coming first place at Ramblers, once, in F grade. It was fantastic and may or may not have caused me to sing loudly in the car on the way home, but all victories are fleeting.
It is what we do next that counts. It is how we act in between being temporarily sensational that forms our character and our success. Investing is no different, being something that we cannot disconnect from our personalities and our psyche. And the toughest trick of all in the sharemarket is how to handle a superstar.
Everyone thinks that they want this problem. Oh the misery of deciding exactly HOW MUCH money to extract from this golden baby! But you do not want to be in this position. Why? Because nobody, with rare exception, ever does the logical thing. If they do, they are an outlier, a wayward statistic.
When I was commuting down to Wellington for the bank, I saw something curious. There would be the usual portfolios, well diversified, cookie cutter. Benign, sage, does-what-it-says-on-the-tin stuff. Then there would be this other thing. This one stock. They hadn't mentioned it to the previous adviser, they would say, but they thought I might be interested because of my sharebroking background. We keep it off-portfolio, they stated. In many cases, at that point, this wonder-child on its own dwarfed the ENTIRE value of the conservative mix. Often by 10 or 20 times and occasionally much more.
Wellington's quiet-as-a-mouse, numerous, "accidental" multi-millionaires. On paper. I would play my part, the ex-broker turned voice-of-reason portfolio manager, and swing the discussion around to what to do about this market tiger skewing their risk and causing sleepless nights because of the 40-fold profit made only in six years.