This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Take Responsibility for Your Stock Losses

Here's the only excuse I would accept from an investor: Aliens from Alpha Centauri landed on earth and gave a huge technological secret to the rival of the company whose stock you own. OK, when that happens, you are excused. Short of that, everything else is your own responsibility.

Priorities and Homework

Excuses are just a sign of how lazy we all are (me too), including boredom and procrastination (guilty). If we are going to be investors, then we must do all the heavy lifting that's called work. If it were easy and painless, then everyone would be a fabulous and wealthy investor. But it's not, so you have to outwork and outhustle the next guy.

Recall that Michael Jordan didn't initially make his high school basketball team. After that, he swore he would never be outworked by anyone ever again. He went on to become the greatest player ever. There's a lesson in that.

We all know guys who can recall every baseball stat of their favorite team off the top of their heads; win-loss records, slugging percentage, ERA. Ask them about the top five holdings of their mutual funds , and they look at you as if you have two heads.

Some people spend more time investigating the purchase of a refrigerator than they do a stock or mutual fund. You have to wonder why people put more time into planning their next vacation than they do their retirement. A vacation is two weeks long; a retirement can be 20 years. There is something wrong with the math here.

The Freedom of Responsibility

Not to get all Zen on you, but once you accept this, there is a certain exhilaration in the concept. Suddenly, planning for your own retirement takes on a different hue. You become more focused, motivated and excited about learning.

Short cuts (i.e., stock tips) make you laugh. When other traders whine about their bad luck/the Fed/market makers, you can snicker to yourself at how they are fooling themselves.

As the magnitude of the awesome responsibility of taking control -- and responsibility -- sets in, it tends to sharpen the mind. It is empowering.

I think Spider-Man may have gotten it backwards: With responsibility comes great power.

This column was originally published on April 12, 2005.

Barry Ritholtz is the chief market strategist for Ritholtz Research, an independent institutional research firm, specializing in the analysis of macroeconomic trends and the capital markets. The firm's variant perspectives are applied to the fixed income, equity and commodity markets, both domestically and internationally. Other areas of research coverage also include consumer, real estate, geopolitics, technology and digital media. Ritholtz is also president of Ritholtz Capital Partners (RCP), a New York based hedge fund. RCP is driven by the analysis performed by Ritholtz Research. Ritholtz appreciates your feedback; click here to send him an email.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ALU $3.93 0.77%
MCD $96.50 -1.30%
AAPL $131.82 -0.17%
FB $80.20 -0.43%
GOOG $539.63 -0.03%

Markets

DOW 18,126.12 -36.87 -0.20%
S&P 500 2,120.92 -2.56 -0.12%
NASDAQ 5,097.9760 -8.6170 -0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs