Let me look around my area, 2 blocks away I buy my fruit and veggies from a Mexican lady, they have couple pick ups, a farm, and they buy some wholesale. Family business, no employees, they run a store with milk, beer, cigarettes, lotto tickets, not much to look at.
We are friendly, if you speak their language, and learn to laugh with them, they get to trust you. They know you are educated, and ask you questions. In 4 years, you know most all about them, and reverse.
They clear about 35% profit, after taxes, they cheat a little with cash sales, and they grow their business adding another smaller store, law of large numbers, same staff, more sales, more profit. A son runs the new location, they figure a lot better, +40% profit. They turn their capital, 2.5 times in a year.
They work long hours, customers want service at their convenience, hence the term, Convenience Stores, lets say 60 hours a week, one day off.
Now we are about to scare most of us.. Why, we don't even get close as professionals to make as much as a 3rd grader educated lady from a village in Mexico with 60 years on her back. Strange, no.. we just don't know enough as an industry to do what we should. Pros at other industries make 10 times to 15 times more profits than we do.
Before you throw this writing in disgust and curse me out, I will explain. I come from Engineering, Safety, if I don't do my work right, people die.
We must be good and get lots education and experience, before we are turn loose in an explosive atmosphere department at Mitsubishi car paint line, with robots that talk to each other, have meeting and make daily decisions, 1100 chemicals in use. A puzzle for the best engineers in the world. Get it, quality, not quantity.
We need lots of people asking why? Trying to learn why our system doesn't work as it should. Why computers got better in 40 years, and we seldom use them in investing, or trading. Well we type, we look up graphs, charts, we can do research. Hum.. a second year High School student does that daily, and some are computer wizards, which most of us are not, not even close to knowing how to program a small subroutine in a calculator.
I see a lot of people branding designations, letters after their names, not needed, but a shelter to upgrade an industry similar to real estate, part time sales people.
Like politicians, didn't make as a lawyer, become a councilman, etc. In our case, got no job, maybe I go to Merry Lynch and become a broker, sure you must pass an exam, is it hard? By the looks of people in brokerage firms, with very few exceptions, no, the exam can't be that hard.
Since I come from the outside, I dare to question the system. Then I realize, if our benchmark $SPX makes from 11% to 17% average per year, people at Funds must at least try to duplicate that performance to keep their jobs.
It is then an industry standard, and most people learn and work in a system where the bar is pretty low, and we become non competitive.
Before this extends too long, perhaps a few recommendations from an MBA Business and Safety Consultant, an Ergonomics expert, used to fix very large systems and make them work, shh. also a great trader..
I would get outside consultants to come in and do research to see why the Industry is not producing better results. We can look at leadership, staff training, minimum educational and cultural requirement.
Analyze use of computers automation, hire think tanks to compete with 'known' industry Gurus and leaders, inject a bit of Adrenaline in a decaying system, presently not performing well.
I recall as a new Engineer at $AIG got to high management quick, turnover, some luck, highest producer in 10 state region, older, MBA, those things help.. I learned top management required 20% profit from each department, and they got it, a slow non profitable industry like insurance.
I remember sharing tasks and new ideas and approaches to very difficult engineering tasks with some of the sharpest individuals I ever met. We worked hard, and we played harder. Motto of first company my daughter Engineer at $CAT HO think tank, told me about. Work hard play hard, as a team.
Teamwork, not individual performance, where one person gets all the credit, and no one else progresses. A team approach where every person in the team shares equally responsibility for the group's success, or failures. We need those to get better, because we dared to experiment, to go outside the proverbial box.
Maybe I don't get it, life at times rewards some, many times and others very little, stimulus response, we stop trying very early, if our system is not very smart.
Question your trading tools, your bosses expertise, the past results trying same old tools. I feel the key to multiplying profit results in investing and trading ten fold is research and plain hard work. If we do not know how to research, we cannot improve.
You may feel I am acting superior and perhaps I do not understand your particular Industry. You may be right, you improve it, you make yearly profits of 400%, instead of 17% with divs added, then I do not need to write this paper.
Happy New Year, 35% profit selling fruit? Remember that!
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.