Warren Buffett once said, “I’ve never swung at a ball while it’s still in the pitcher’s glove.” Incidentally, that perfectly describes the category of investing mistakes that I am prone to make—I am likely to be predict something way before it actually happens. I am much better at predicting what will happen than I am at predicting when it will happen.
For instance, at the end of 2011, I began writing Seeking Alpha articles mentioning that interest rates are likely to increase soon because the economy is improving. Well, one year and a half later, and we’re only now just starting to realistically consider the possibility that rates will be going up. The good news is that I have not been harmed in any way by this call—I spend my time focusing on finding excellent companies to buy at decent prices, and then letting the dividends roll in from there. When you spend your life stuffing your personal balance sheet with ownership stakes in Coca-Cola, Johnson & Johnson, Colgate-Palmolive, Exxon Mobil, and others, it is hard to screw life up from an investing perspective if you let the dividends pile up and hold those companies for the long haul as part of a diversified portfolio of stocks.