The hilarious movie “21 Jump Street” is more than just a laugh-fest with a cop plot. It contains a lesson we all need to remember.
The set-up is: two young cops who go undercover into a high school to bust a ring of pushers of a new designer drug knew each other in high school ten years earlier. One guy was cool, but dumb, the other was a smart nerd. Yes, every cliche in the book. but bear with us, we have a point to make.
Everything the cool guy knew from his high school days turned out to be wrong. Being a “bad-ass” was no longer cool. Carrying your book-bag with just one strap over your shoulder was no longer cool. Etc.
This is the same problem we see with generals, though of course on a much grander scale. They are said to be always fighting the last war. They were young lieutenants then and learned how to succeed using fresh new tactics.
This has been going on for thousands of years, but IFO learned about this from a book written several decades ago describing all the great American Civil War Generals on both sides. They had all fought in the Mexican-American War 30-some years earlier. It took them a couple of years to figure out how to fight the Civil War. Students of that terrible time can go into details on tactics, etc., but essentially they had learned how to counter the successful tactics of the past.
But the lesson for investors is the same. Just because you were successful using a tactic in the past doesn’t mean it will work in the future. IFO is changing her investment tactics even as we speak. She is still learning all she can about companies before she invests, and she is attempting to Buy and Hold as much as possible.
She is no longer keying off of dividends, but is doing more comparisons. On Yahoo! Finance, you can compare any group of stocks you choose and the software will throw up charts showing how individual companies have performed compared to each other. Very cool.
Another thing – don’t worry about a real estate bubble any more. Don’t worry about a dot.com bubble any more. Have you seen a tulip bubble lately? No. Those are done. Look for the next bubble!