The "banned" tangent
My article on GBDC contained a self labeled tangent that the SA editors requested that I delete. This is the content of that deleted material:
Before I go on, please allow me to go on a related tangent. There are components of my approach to investing that have a Biblical basis. That basis can be found in the following proverbs:
Proverbs 10:04 - Poor is he who works with a negligent hand, but the hand of the diligent makes rich.
Proverbs 14:15 - The naive believes everything, but the sensible man considers his steps.
Proverbs 19:02 - Also it is not good for a person to be without knowledge, and he who hurries his footsteps errs.
Proverbs 15:22 - Without consultation, plans are frustrated, but with many counselors they succeed.
Proverbs 14:23 - In all labor there is profit, but mere talk leads only to poverty.
Proverbs 27:23 - Know well the face of your flocks; and pay attention to your herds.
Here is how I implement that advice. Your investment portfolio is the 21st century equivalent to "flocks". Know those investments well. To me, that means knowing the operating metrics well. The metrics will also play the role of being your "many counselors". You should be able to observe that I have used the "many counselors" concept in setting my dividend CAGR projections.
Do not be negligent by slacking with your due diligence when you are "only shopping" for new investments. Do not rush your due diligence. We all want to buy on the dips. Your due diligence is not over just because a dip comes along. Your due diligence is over when your due diligence if over. I have used the buy first and learn about the stock latter approach. That method has not worked well for me. I have a goal of never doing that again.
Do not base your investment decisions on mere talk. A three minute chat about a stock on CNBC is mere talk. The overwhelming amount of investment message board conversations are mere talk. The headline judgments from the analysts are mere talk, too. If you do not know how they reached their conclusion, you should not trust in that conclusion. I often find faults with how the analysts reach their conclusions.
Some of those concepts are common sense. Some are out of the consensus beliefs. It is my hope that many of the readers of his content are fellow Christians or Jewish believers. The concept that there is a Biblically directed way to invest could be a foreign concept to you. This is a topic rarely covered by the residents of the pulpit. I wanted to share with you what I believe so that you would know.
I have always had the perception that my due diligence was higher than average. Then along came the market crash of 2008. And that was a transforming event. 10-Q's went from being optimal reading that was done by nerds to being required readings in many sectors where I invest. I still do not read the full document. I use the binocular tool or the search for specific text box to find several items of specific information. Metric awareness went from being "a" guide to being "the" guide. Dividend growth inertia went from being very important to being a redundant indicator that is good to know. And risk metrics went from being a small consideration to being an equal consideration when compared to CAGR related metrics. The quantification of risk went from being a nice idea in theory to a required task.