Why Experience Outperforms Strategy in Investing
The True Cost of Trying to Beat the Market
One day, a woman stopped Pablo Picasso on the street and asked him to draw something for her. In just a few minutes, he sketched a masterpiece on a napkin, and when he handed it back, he asked for what would be equivalent today to $30,000.
The woman was shocked. How could something he created in mere minutes be worth such an outrageous amount? She asked him, and he replied that he wasn’t charging for those minutes but for the countless hours he had invested to reach that level of skill.
Investing is quite similar. It’s not about short-term performance but about long-term returns.
What does this mean? You might invest in Dogecoin and score bigger returns than mine in the short run, but over 4-10 years, my returns will likely surpass yours.
This is because I’ve gone through a learning process that you’re still yet to experience.
It’s common—we all go through it. We often think we’re smarter than the average. We assume we have better information and try sophisticated strategies t…