InvestorQ : The analyst tells me how often he was right. Does that matter?
NISHA Nayak made post

The analyst tells me how often he was right. Does that matter?

Anu Biswas answered.
3 years ago

You need a good analyst with a good understand of the market. But you surely are not going to be bothered if your analyst is right 70 % of the times or 80% of the times. Frankly it does not matter. What really matters is what you do when you are right. What really matters is how much conviction you show when you are absolutely right. Take the case of Warren Buffett. Over an investment career spanning 55 years, Warren Buffett made most of his money by focusing on a handful of stocks. A few names like Coca Cola, GEICO and American Express have generated most of the returns for Warren Buffett. In between he has had many wrong calls including the notorious position that he took in IBM. However, that is immaterial in the larger scheme of things. What matters is that when he got his call right, he made the best of the situation. That is what has, perhaps, distinguished Buffett from the other creed of investors. Paul Tudor Jones may have made many wrong calls in his career but sticking his neck and buying on Black Monday 1987 was the moment when he literally staked everything on his view. Same is the case with Paul Johnson when he shorted sub-prime mortgages in 2006 and made $15 billion on the trade. As Jesse Livermore, the legendary trader rightly put it, “What you do when you are right is more important and meaningful than how often you are right or how often you are wrong”.