“Pad kid poured curd pulled cod.”
Scientists at MIT say it’s the toughest tongue twister ever created.
“If anyone can say this 10 times quickly,” declares MIT psychologist, Stefanie Shattuck, “They get a prize.” Or perhaps notoriety in the Guinness Book of World Records.
It’s that difficult. Go ahead and try. Before long, you’ll be scurrying back to the safe and easy tongue twisters to redeem your self-confidence. Like “Sally sold seashells by the seashore,” or “Peter Piper picked a peck of pickled peppers.”
And that’s my point today – to prove that shunning difficult tasks is in our nature. Especially when it comes to investing.
Heck, even the greatest investors are guilty…
Charles Munger, the unsung hero behind the success at Berkshire Hathaway (BRK.A), once summed up the firm’s investment approach by saying, “At Berkshire we have three buckets: yes, no and too hard. We just throw some decisions into the ‘too hard’ file and go on to the others.”
Now, I might not have nearly as many zeros behind my net worth as Mr. Munger, but I gotta say… he’s making a colossal mistake. And here’s why…
Buffett’s Biggest Blunder?
I only took a few physics classes in college. So do you think I was always familiar with nanometer-sized semiconductor components and the magnetic force created by spinning electrons? No way!
Yet back in 2009, if I simply tossed the technology into the “too hard” hopper, I would’ve missed out on the six-month, 125% run-up in shares of the spintronics industry pioneer, NVE Corp. (NVEC). WSD Insider subscribers would’ve missed the boat, too.
Same goes for my knowledge of rare earth metals, additive manufacturing and the budding body of work in alternative metal mesh sensors for use in touchscreens.
I was as green as you could get when I first met with Uni-Pixel’s (UNXL) CEO, Reed Killion, way back in May 2011.
But if I simply ignored him and dismissed the company’s potentially disruptive technology as “too hard” to understand, my MicroCap Tech Trader subscribers would’ve missed out on the stock’s meteoric rise – from a lowly $7.50 per share to more than $41.
What about the overlap between rules-based application development, scan-based trading, supply-chain optimization and the Food Safety Modernization Act (FSMA) signed into law in early 2011?
Sorry, but I never took a single Six Sigma course during my MBA program. And the closest I ever got to being truly on the “inside” in Washington, D.C. was when I attended the Texas-Wyoming Ball for President Bush’s second inauguration.
However, if I simply declined to meet with Park City Group’s (PCYG) CEO, Randy Fields, and spend almost a year getting up to speed on the technology, MicroCap Tech Trader subscribers wouldn’t have been able to enjoy the stock’s run-up from our entry price of $4.05 in April to over $11 in October.
(In case you missed it, here’s why I’m convinced the stage is set for an even more impressive run-up for the stock.)
The Only Way to Invest
The list of “too hard” opportunities I’ve come across and pursued (instead of discarded) goes on…
From 3-D bioprinting, femtocells and emerging markets currencies – to biometric authentication, digital watermarking and haptic sensors.
Truth be told, the “too hard” opportunities I come across end up being the most profitable ones – without fail. Why is that?
It’s simple, really.
While everyone else passes, including the Warren Buffetts and Charlie Mungers of the world, I dig in.
Sure, it takes time and dedication. But you know what? That time breeds understanding.
It gives me an unparalleled informational advantage over the throngs of investors who simply pass on an opportunity – or, worse yet, wait for the technologies to grace the pages of The Wall Street Journal before considering an investment. (At that point, all the big gains are often already realized.)
Bottom line: Peter Lynch’s famous investment principle, “Invest in what you know,” isn’t an excuse to be lazy, or to overlook complex investments.
Not to me, at least.
It’s a call to action to figure out what we don’t know – and then invest the time required until we do.
That way, we gain a serious edge that we can consistently exploit for triple-digit profits. (I think that’s much better than a mention in the Guinness Book of World Records for mastering the toughest tongue twister in the land.)
So next time you come across the hardest investment you’ve ever tried to understand, dive in! Don’t run away. My experience proves it could be the most profitable investment you ever make.
If you’re too lazy, of course, you can piggyback off my tireless efforts.
I just finished up my research on a technology that can dramatically reduce air pollution by harnessing the power of a force that’s several billion times stronger than gravity. For all the details on the technology – and the tiny micro-cap company behind it – go here.
Ahead of the tape,