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Something For Nothing – Returns Generally Correlate to the Work You Put In

July 19, 2017


Something For Nothing – Returns Generally Correlate to the Work You Put In


Guess where the United States ranks in Fundamental Valuation Ratios in International Equity Markets?Something For Nothing

Source: SC

Dead last.

Based on a variety of valuation indicators, the US is expensive – more expensive than any other country on the list.

So what’s cheap? Where is the desirable place to be?


First a story…


Out there, you have to be very careful because if something goes wrong, you’re all by yourself.

We would drive for hours on washboard roads without seeing another person.

Every now and then, we’d stop to make sure everything in the truck was still tied down, check the tires, look at the suspension, and take a pee.

I would take this trip a couple times a year with the same group of friends. Really, there is only a certain kind of person that could put up with the type of travel we were doing.

We’d off road through the coastal desert in search of waves to surf. Everything we needed for the trip had to fit in the truck. Water, food, toolbox, sleeping bags, and surfboards.

There is literally no one out there.

Just to find the waves, we’d have to drive for over 10 hours.

And that didn’t include the time lost from things like flat tires and flooded road crossings. Something For Nothing

I’ve changed my fair share of flat tires.

Something For Nothing

A small water crossing just before we hit the dirt road.

So why would we do this? Just for the heck of it?

It’s the adventure. The exploring. The not knowing what you’re going to find.

We were in search of perfect waves with no crowds.

But we’d have to put in a ton of work. We’d sleep in tents that got sandblasted by the desert wind all night. In the morning, everything would be coated in a thin layer of sand… including the food we would scarf down before surfing our brains out all day.Something For Nothing

Sleeping all night in the wind is miserable, but waking up to a site like that is priceless for a surfer.

Then, we’d drive back home.

Hours of bumpy roads, then hours of paved single lane highways, military check points, a border crossing, and passport check.

We’d have tales of adventure with a sunburn and scars to prove it.


So why am I sharing this story with you?


Every time I would come back from one of those surf trips, someone would say, “I want to go next time!”

And when the next time came, they’d find some excuse not to go.

Now, fast forward to today.

The story is the same, but replace the surfing trip with investing.

Returns generally correlate to the work you put in.


If you put in a lot of work to find perfect uncrowded waves, you’ll find them.


If you put in a lot of work to find great uncrowded investments, you’ll find them.


But, you have to put the work in.

Think about this for a second:

Index funds and ETF’s have had their highest inflows ever over the past several years.

That means that people are placing their money into passive investment vehicles that buy the general stock market.Something For Nothing

Source: Bloomberg

To make the investment, you literally just click the mouse a couple times and that’s it.

The investment is very easy and very crowded. Essentially, investors are expecting to get something for nothing.


Are ETFs and index funds bad?

No. In fact, under normal circumstances, they are a great way to spread your investment out over a number of different companies and industries.

But, we are not under normal circumstances. The market is expensive, so if you’re investing in general market tracking ETFs and index funds, you’re just spreading your investment out over a number of expensive companies and industries.

Now is the time to be looking in other areas. Do the work. Put in the extra time.

Just like finding waves.

Returns generally correlate to the work you put in.

Oh… and here is that top part of that list Something For Nothing

Source: SC


Want to put in a little extra work to find uncrowded opportunity?


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