True success exists only when you understand the “how?” and the “why?”
Wednesday, April 30th, 2008This post was inspired by a great article written by Sean Hannon this week. In his article, which is focused on understanding investment results, he used this simple chart to illustrate the possible results of an investment (I have reproduced this chart with my own color-coding):
Sean’s point is that you should only feel truly successful about when you have a good outcome that is produced by a good process. If you invest in a stock on a whim and it happens to produce a great return, you should not consider yourself a great investor-you should think of yourself as a lucky gambler. Similarly, if you are using a proven system that works, and you get a bad outcome sometimes, you shouldn’t feel too bad. Over time the right process will produce good outcomes more often then the bad process.