My “Welcome to the Real World” moment
We don't know what we don't know. And I didn't.
Here’s the revised version:
This was my “first rodeo”.
Fresh out of college, I was convinced I had a gift for picking stocks. My evidence? Winning a 12-week stock-picking contest in my senior Investments class. I even put it on my resume.
Fortunately, a chance meeting with the Director of Research at a large trust company in Kansas City set me straight. He had the credentials — prep school, Duke, Wharton MBA — and he had the kindness to be honest: without real investment experience, getting a foot in the door anywhere would be an uphill battle.
He loaned me his CFA (Chartered Financial Analysts) Directory and suggested I spend a month meeting as many members in town as I could.
That month changed everything. Breakfasts, lunches, phone calls, and office visits with some of the sharpest people I’d encountered. They shared advice that no classroom had offered. When I reported back, the Director surprised me with a question: did I know anything about personal computers?
As luck would have it, two high school friends and I had spent the past year selling PCs and accounting software to small businesses. He invited me to lunch.
The trust department had recently received a 1986 IBM AT — the state of the art at the time, with a blazing 6MHz processor and an amber monitor that consumed half a desk.
Nobody had worked up the nerve to turn it on. He hired me to change that.
My first real task was updating what the department called the “working list” — a five-page landscape document covering every stock clients owned or the committee was considering, with roughly 30 data points per name: price, volume, P/E ratio, growth rate, debt ratios, and each stock’s Buy/Hold/Sell designation. Every Monday morning, the Investment Committee debated every name on it.
The catch: the data was two weeks old. The process was to mail the marked-up list to a firm in New York, which would update the figures and mail it back in time for Friday copies. No fax, no email, no spreadsheet.
Using Lotus 1-2-3 and a modem connection to FactSet, I rebuilt the whole thing with data from the previous day’s close. Fresh numbers, distributed the afternoon of the meeting — not two weeks later. The following Monday, I arrived early and distributed 25 copies of the updated list before anyone sat down. Current data. Clean formatting. Ready to go. The committee thought I was a wizard.
Then came the lesson.
Nothing changed.
The same people championed the same stocks with the same stories. The same factions argued with the same factions. The same voices carried the room. Out of 250 stocks, the committee voted to change the designation on exactly one.
That was my first rodeo.
Investing isn’t driven by data — it’s driven by people. Each person brings a different education, a different set of experiences, a different “view,” and all of it shifts constantly. Sometimes the loudest voice wins. Sometimes it’s the most senior one. Sometimes it’s whoever has the best-looking chart that week. None of it is objective, whether you’re an individual investor, a portfolio manager, or running a hedge fund.
Investing is messy. To paraphrase John Bogel, founder of Vanguard, “Nobody knows nothing”.
Don’t follow any single guru. Keep a long-term outlook. And eventually — in a month, a year, or a decade — you’ll know whether your good decisions outweighed the bad ones.