Myth Exposed: “The best investments require knowledge most people don’t have.”

Reality: “The very best investments are the ones you understand.”

Warren Buffet, one of the greatest investors of this century is a perfect example.  As a bright and accomplished as he is about investing, he rarely invests in technology stocks of any kind.  He works out of his simple office in Omaha, Nebraska and has been until just the last couple of years.  During the dot com boom he did not invest in any of the companies that had a quick run up, and when asked why he simply said (paraphrase) “I did not invest there because I did not understand it.”  Instead, he has invested in companies where he understands and knows their products, markets, and business strategies.

As a local sales rep years ago at FedEx I had opportunities to call on businesses all over the area.  I remember going into a local company who struggled for years and had been a penny stock company.  During that visit I remember talking to a warehouse manager who was telling me that their new product offering was unique to the market, cheaper and better than their competitors.  I remember him saying, “I am buying our stock now because in the last 20 years I’ve never seen a product like this one.”  In my mind it never even occurred to me until much later that if I had been paying attention I would have done the same.  Guess what happened – the stock went from $2.50 a share to over $20 a share in just a few months.  What did I learn from this?  This manager knew his company, new his product, and had the foresight to invest when he knew it would benefit him the most.

There were a couple times in my own business at FedEx that I could have invested in my own company’s stock when all our officers and peers were investing – that should have been a big clue, but alas I wasn’t paying attention to WHAT I KNEW at the time.  Instead, I was too busy making a living to pay attention – does that sound like you?  What opportunities are right in front of you outside of real estate?

Whether its cars, stocks, stamps or knitting if you don’t have a specialized knowledge, pick an area and start learning TODAY.  If it is real estate we can help you at a Virginia Real Estate Mentor.  Don’t wait like I did – it could be very costly to your investing success!

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