Knowledge, Discipline not Emotion

Country Routes - July, 1997

This article is an addendum to my article of June, "Can a Financial Advisor Add Value to Informed Investors?"

This is a general observation I have made over the past year in discussing many things here on this financial forum. I have learned a lot from many of you when you give me facts and information. This knowledge is useful to me. Another source of knowledge I have gleaned from many of these discussions is how some of you feel about your investments but even more, how you feel about Financial Planners. We all have strong feelings about the way certain things are. That's fine. However, when we allow those feelings and emotions to get to the point where they cloud our thinking, then we tend to lose focus of the facts. We become subjective instead of objective.

One thing successful investors need is correct knowledge. But, that alone is not enough. Another very important ingredient is discipline and control of your emotions. I have heard many top fund managers call their style of investing "A Discipline". Learning to focus on the fundamentals and facts instead of the emotional element money presents to many of us is why they make good decisions in buying and selling stocks. It is called being a contrarian. Being a contrarian is the topic of another article I plan on writing. Many people have heard of that expression before but what does it mean to you in your personal situation?

I believe that Bob Krembil of Trimark perhaps more than the others exemplifies this philosophy. He is aware of the dynamics in the market but doesn't let it sway him from the basics and fundamentals of his particular investment style. I remember the times that he was criticized for doing some of the things he does. There are times when he was unpopular. He stuck to his guns. He realized that that was part of the territory. Now, after starting Trimark 15 years ago, there is hardly anyone out there that will not agree that he is one of the best. It wasn't always that way. Another one I have to mention is Sir John Templeton, of course. He was one of the original contrarians out there that applied the Benjamin Graham style of value investing. Perhaps he is one of the best known and successful of them all.

Sometimes there is a delicate balance between what you feel and what you know. Objectivity is necessary to make well-informed financial decisions. Your feelings cannot be relied on as much. The more correct information you can get, the better you can rely on those feelings. Your mind is the best computer you have. If you feed it the correct knowledge and couple that with enough experience, your mind can give you the right answers. I like to call it intuition.

If you have any questions, please call Reg Borrow at (519) 855-6639. He is an Independent Financial Consultant for Regal Capital Planners Ltd.

Money Matters Index                                 Home Page

Created: Mon Sep 23 10:30:50 1996
Web Page designed and created by Champ Consulting Services, Georgetown, Ontario