Protecting yourself from stock market losses is a built-in feature of the value approach to investing in much the same way that a camera comes as standard on a smart phone.
Here’s an analogy.
As an ex rugby football scrum half (or ‘inside half’ as my own father likes to call it since he’s a proud Welshman from the Deep South) I can tell you that there is nothing more exhilarating than driving your own shoulder into someone else who thinks that because you are the smallest guy on the pitch (scrum halfs, if you haven’t already noticed are usually, but not always short) you’re an easy target.
For the record I’m 5’7″
This is why in my playing days I did an inordinate amount of exercises – in addition to the normal strength and cardio/recovery work – that not only bulked up my shoulders but also allowed me to practise the correct technique when tackling.
- Placing your head on the right side of the
victimsopponent’s body to protect yourself when going in for a hard tackle.
- Going in low for the tackle as there’s actually no point in a small guy trying to tackle a big guy up high since it would turn into an unfair contest.
- Learning to remain in a defensive formation instead of trying to take on all the tackling duties
- Communicating team-mates which requires listening as well as talking
- Once the tackle is made making sure that you are the first one to your feet AND competing for the ball as this results in you more likely winning possession, a penalty or the ability to slow the ball down to allow your mates to join in the fun
Bringing down the fatties, gym rat loose forwards and the peacocking overconfident tall guys was my delight.
Was I always successful at tackling?
Nope, but I made sure that the next opposition player to come running at me with the ball in his hand knew how frustrated I was from missing the previous tackle 🙂
I’m surprised to this day that I didn’t sustain nastier injuries from all this caper as week in week out every Saturday I’d walk onto the pitch with the same mindset knowing that a bunch of fired-up guys were going to try and tear me apart as much as I wanted to tear them apart.
I loved every minute of it.
As for missed opportunities, I’ve had those in the stock market and they’ve taught me to focus more on competing since the majority of the missed opportunities I’ve had are when I’ve simply not pulled the trigger.
To properly protect yourself when dabbling in stocks you need to focus on your defence much more than your attack. That’s the smart way to think about it.
Being a successful investor is more possible when you accept Benjamin Graham’s most important concept as fact.
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