No One To Blame

You will sell winners too soon. You will hold losers too long. You will buy stocks you shouldn’t. Just don’t blame others. When you blame others, it proves you didn't do the work you were supposed to do. Fully own your investment mistakes so you learn, grow, and move forward.

Whether you watch American football, European football (soccer), cricket, baseball, or basketball – these are team sports. Th team may have important players, but the credit and blame get cast over the entire team. Yes you can blame the kicker that missed the game winning field goal or the player that missed the penalty kick or the goalie that allowed it but even in these situations everyone knows it was the team that put the individual in that position in the first place. The team is to blame.

Individual sports like tennis or boxing or golf are different. In individual sports the best players might have coaches, trainers, agents, and others supporting them, but in matches or tournaments it’s one player versus another, or one player versus the world. The player gets the credit for the win, and the player gets the blame for the loss. It's why individual sports are agonizing even for the best in the world. Eight-time major tennis champion Andre Agassi said,

“It's no wonder that tennis causes more divorces among players than any other sport. It's so solitary, so cutthroat, it's Darwinism in a pair of shorts. You’re always at the edge. There’s no middle ground in tennis, like life itself. You’re either winning or losing. You’re never safe. Tennis is a psychological and physical war, one that never ends. It’s gladiatorial. You’re out there all alone, with no one to help, no place to hide.”

Stock picking is an individual sport. It doesn’t matter if you’re a small retail investor managing your $1,000 Schwab account or you’re a CIO/PM of a $10 billion fund. As a CIO/PM it doesn’t matter if you have a team around you. Your investors don’t care. You get the credit and the blame. You have no place to hide. The outcome is focused on you.

It makes the wins intoxicating. You can’t wait to journal, write your annual letter, self-reflect, replay your achievements and humblebrag to the world. Bull markets are fun. Stock’s go up 4 out of 5 days, and your last buy decision takes 4.3 seconds to be positively reinforced. Everyone sees the upside in everything. You’re a great stock picker. 

Losing is excruciating. The bull stops running, and the bear starts biting. Market drawdowns are a cascade because investors sell stocks that are down 5% to buy more of the things down 10%. They do this over and over again until everything is down.

When stocks stop going up, our self-confidence evaporates. Stocks go down 4 out of 5 days. Small stocks stop positively reacting to news because everything becomes a reason to sell. The “catalyst” you’ve been waiting for hits, and the stock still doesn’t go up. The same stocks you loved 100% higher you now hesitate to buy lower. In bear markets everyone looks at the downside of everything.

The market reverts back to longer feedback loops (aka reality) when it takes a year or more to be proven right on a thesis.

When stocks go down we stop looking in the mirror and start blaming everything and everyone else.

We blame others

When you are an amateur investor, you like to blame others. You blame other investors, talking heads on CNBC, analysts, recommendation services, your friend’s boss who gave you the hot stock tip. Amateur investors consciously or sub-consciously self-sabotage themselves. They weren’t serious when they made the investment, so they aren’t serious with the outcome. They must justify not doing any work into the investment so they blame others. Are you an amateur investor?

We blame the stock market, market conditions, or anything macro

"Investors who buy 'undervalued' small stocks have been punished for their prudence. People are wondering. How can the S&P 500 be up 20% and my stocks are down? The answer is that a few stocks in the S&P 500 are propping up the averages."

This quote is from Peter Lynch in 2000. You likely thought it was from 2024. 

Investors have been complaining and blaming the same things for decades. 

When you are a sea captain you don’t blame the tides and the weather. When you are a stock picker you don’t blame market conditions or macro forces. Bull markets, bear markets, recessions, interest rates, inflation, presidential elections, wars – they are all part of the journey. It’s your job to pick stocks and navigate through any environment. 

Never blame market conditions for underperformance. We are all dealing with the same circumstances. Losers take the credit in the good times and then blame the market in the bad times. Winners take responsibility regardless of the outcome.

We blame management teams

Many management teams over promise and under deliver. But we investors are not completely innocent. We like to push management teams for higher growth numbers to help justify not caring about valuation. We let the bullish echo chamber in our minds build up an unrealistic view of a business we like. When our unrealistic expectations aren’t met we sell and blame management for not hitting numbers they never agreed with.

When we lose money, we like to nit-pick. “Management wasn’t aligned!”. They didn’t own enough of the company. Whether a CEO owns 1% or 40% of the business, no one wants to fail. We forget that running a business is hard. It’s a daily knife fight with 100 other competitors vying for the same market and customers. When things don’t work out, we like to tell ourselves management was negligent, incompetent buffoons. It lets us sleep better at night with our investing mistake to point the finger of blame. Sometimes management is to blame, but often they tried their best and it didn't work out. Sh!t happens. 

We blame the lack of ideas

 “I just can’t find ideas.”

“Everything is too expensive.”

There are 60,000 public companies in the world. If you can’t find a handful of great investment opportunities that fit your flavor of investing, you aren’t trying or you aren't growing (or both). Every time I have complained about the lack of investment opportunities it was because I wasn't working hard enough to find them.

We blame the lack of resources

If I just had [insert anything] I would be successful. 

You don’t need another computer screen, another newsfeed, another opinion, another self-proclaimed guru, another crutch to replace "thinking". You have what you need between your ears. Develop it.

The issue with blame is it keeps us from growing and becoming the stock picker we were meant to be. There are two people in all of us. The person you are today and the person you aspire to be. It’s your job to make sure they meet as soon as possible.

Blame is a sin that transcends investing and business and flows into our personal lives.

Tomorrow, December 23rd, is always an emotional day for me. 11 years ago, my mom was killed in a freak accident. She was walking across the street to get the mail at dusk and was struck by a car and killed instantly.

As you can imagine this was an emotional time for our family. 

The police did a full investigation. They wanted to see if the driver was impaired, distracted or speeding. Was the driver negligent? 

The driver was a young woman. 

If I’m being completely honest, deep down in that moment I wanted the driver to have been speeding. I wanted her to have been drunk. I wanted another excuse to hate her so I could justify the pain I was feeling. 

During the investigation we learned the driver was in counseling for depression. Looking back I can’t imagine the pain she was feeling. 

A week after the funeral the police finished the investigation. They found that the driver wasn’t under the influence of drugs or alcohol. She wasn’t speeding. She wasn’t on her phone. She didn’t even have it on her. The police found nothing. 

To this day I still don't know what happened. I don't know if it was the sun at dusk that clouded the driver's vision. I'm not sure if my mother just didn't see the car coming for some reason. I imagine it was just a bunch of random things leading to a tragic outcome.

24 hours after the accident I hated the driver. Two weeks after the accident our family had time to reflect. We found the driver's address and sent her a card. We wrote a few sentences with “We Forgive You” at the end.

We needed to move on and I hope it helped her move on.

Whether it’s in life, or business, or your portfolio we often get punched in the gut by events we don’t see coming. We look around for something or someone to blame, but oftentimes there isn’t anyone to blame even when there is someone to blame. Sometimes sh!t just happens.

The worst thing you can do is let these events change who you are, changing you from a happy person into a bitter person. Changing you from a person of values and principles into a person that doesn’t care anymore. Changing you from a person of action into someone that gives up on their dreams and sits back and criticizes people that win.

The lesson is to keep moving forward. Blame and hate keeps us in the past.

A few years ago I wrote this mantra.

 Rise Early.

Work hard.

Slow to anger. 

Quick to forgive. 

No one to blame. 

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