Imagine committing an unpremeditated murder. Since we’re all nice people here, let’s say it was a true moment of temporary insanity under great emotional duress. But there the body lies, in a pool of slowly spreading blood.
Let’s further suppose that some quick thinking, a handy mop, and lots of paper towels erase all evidence of our crime. Months later, the police never even thought to investigate us. Years later, we’ve literally gotten away with murder.
Now, imagine that some future misfortune brings us again to the edge of murder…
I’m not saying that you or I would necessarily become serial killers. But I think it’s fair to say that the average human being, having once gotten away with murder, would have a harder time resisting the impulse a second time. All the more so a third time.
And so the initial “good luck” leads to a great deal of tragedy.
I see the same sort of psychology at work when someone decides to try his or her hand at speculation, makes a rash investment, and gets lucky. All the more so if this happens in a bull market and he or she wins again a second time. Or a third.
Each ill-founded success greatly increases the odds he or she will place more dangerous bets.
That’s not just because of the mistaken belief in the person’s stock-picking ability; it’s because the early success tends to result in larger and larger risks being placed on that flawed foundation.
And so the initial “good luck” leads to a great deal of tragedy.
I’ve seen this happen.
I’ve heard from readers over the years who wrote in to brag about huge wins—usually touting their latest picks—only to never hear from them again.
That’s why I was so happy when a reader wrote in to say that he is learning from the patterns he sees in my takes.
He’s getting far more than just a thumbs up or down on stocks he’s considering. He’s learning what I look for—and what I avoid.
No flowery praise could make me happier than this.
If this reader is really coming to understand my method of triage, I’m sure he’ll be able to make sounder decisions on speculative investments. He’ll avoid the bad luck of having good luck on ill-considered speculations. That should set him up for better outcomes going forward.
I’ve been thinking of My Take as a sort of Consumer Reports for investors, not an educational service.
I see now that it can be both.
There’s nothing wrong with subscribers skipping around to focus on takes on stocks that interest them. We’re all busy. I get that. But if you have the time and the interest, I do think there’s value in reading all my takes as case studies. They illustrate the principles of speculative investment I write about.
Nothing drives a lesson home like a real example—and I have 143 of them for you, so far.
That includes whatever I get wrong, by the way.
I don’t claim to be perfect. Nor do I pretend to be able to see the future. All I claim is that 15 years of intense focus on resource speculation has taught me a lot—and given me an industry network to draw upon.
I’m willing to share this with you via My Take, which I obviously hope you will subscribe to. (It’s just $25 per month, and you can cancel at any time if it doesn't work for you—or upgrade for yearly savings if you find it does.)
You can also get a good sense of my take on companies for free via my In The Pit interviews, though I reserve final analysis for paying customers.
The current In The Pit collection is available on my YouTube channel, which I encourage you to subscribe to.
You can also sign up for more free educational content—including notification of new In The Pit interviews—via our weekly Speculator’s Digest.
However you do it, I strongly encourage you to access and learn from as many case studies as you can. And don’t just look for the great successes; I’m convinced that the great wipeouts have the most valuable lessons to teach us.
Sincerely,
