Tuesday, March 17, 1998

Keeping The Faith
By Dianne D. Ferrans ([email protected])

When I reached the tender age of twelve, my parents, concerned over the rising tide of drugs, sex and violence, sent me off to a good parochial school. (I mean, it was the age of Disco!) This school tried to mold our tender minds by placing large banners with quotes on the walls. They thought that if we saw them every day they would burn themselves into our minds forever. They were right! Twenty years later I know:

1. Evil friends corrupt good moral habits

2. Never doubt in the dark what has been shown to be true in the light.

3. Do the right thing because it's the right thing to do.

But what does this have to do with investing? It occurs to me that investing your money in a stock, based only on what you've read in a book, takes faith. It's almost a type of religion. Like most religions, it has its holy evangelists (The Motley Fool), its detractors, its money-grubbing con artists (Full Service Brokers, cold-callers, penny-stock pushers) and its quiet faithful treading the straight and narrow, adding to their investments year after year so that at Judgement Day (retirement) they can enter their City of Gold (Florida, Arizona, Maine -- whatever floats your boat).

As such, my religious training has financial implications as well. Aside from such obvious tales such as the Prodigal son throwing away his inheritance and sleeping with the pigs, I listen to my three lessons:

1. Evil friends corrupt good moral habits -- How many times have friends and family members told you that some day the Great Depression will return and you'll lose it all (ignoring the safeguards that have arisen in the meantime)? Do you have friends who live beyond their means on credit and urge you to do the same? Are there "Joneses" you're trying to compete with by buying over-priced cars and jewelry when you could be buying Intel? Cast these aside, or you'll never see the Golden City!

2. Never doubt in the dark what has been shown to be true in the light -- I admit when the specter of Asia reared its head and the market tumbled I wanted to grab my phone and yell sell! But soon all recovered. If you've done your homework and the company fundamentals are solid, you won't panic when the rest of the market does. When it gets dark, remember what you saw in the light and hold on until morning comes again. It will come again. Despite order backlogs and foreign government tumbles and earnings short-fallings, don't panic when a cloud passes over the market. Wait for the sun to come out again.

3. Do the right thing because it's the right thing to do. My mother was a wonderful person when it came to my financial training. Her 11th commandment was that it was a sin to carry credit card balances. I refused to marry my husband until he paid off his! She was born Loretta-Lynn poor but invested regularly -- in real estate -- from the age of twenty. No college diploma, no pension, but her retirement is secure. Live on 10% less than you make, invest the rest and sleep peacefully at night. Just because it's the right thing to do, and your future self will thank you for it.

I'll get off my soap-box now and let the next preacher through!

Fool On, brothers and sisters, Fool On!

Have a similar tale?
Talk about it in the Fribble Message Folder!