Positioning: Pounce Piles

Putting Yourself in Position

by Mark Robertson

I coined the term “pounce pile” in this investment club lesson back in 1994 (reprised here) and discussed it in a few articles at Better Investing (e.g. Exploring The Art of Pouncing, August 2000)

Wouldn’t any of us like to go two years without a setback or defeat? Lindsay, our 8-year-old, participates in a girl’s soccer league. She and her friend, Lindsay O., have contributed to two such teams that have yet to lose a game. (They’ve been tied once.) All of the girls on the team have demonstrated considerable improvement and have a lot of fun.

While watching the game last Saturday, I was particularly impressed with the way that they lurked in position, PREPARED for an opportunity. For a “herd” of 8-year-olds, this kind of discipline is pretty rare.

I have a hunch that successful investment habits require the same order of discipline, and the 1994 market has been a real test.

Wayne Gretzky, absolutely one of the greatest sports figures in history offered the following explanations for his unequaled accomplishments. “Anybody can chase the puck and lots of people do. I’d rather go where I THINK the puck is going to end up.”

The investment herd keeps spewing new spins that “this time, it’s different.” It may indeed be a minefield and although it seems like it’s taking forever, we have to get in position and be ready. The challenging moments shall pass.

The art of pouncing involves identifying good companies that our club would like to own if, and only if, the price is right. It’s a solid investment club practice to keep and monitor a pounce pile of desirable investments and wait for the opportunity to own them to materialize.

Soccer is not unlike hockey, and we thoroughly enjoy watching Lindsay’s “herd” of undefeated achievers. Perhaps we can all take notes and learn from these youngsters and their Coach?

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