If you’re not a sport fan and specifically a basketball fan, perhaps you are not familiar with the emergence of Jeremy Lin, who prior to coming off the bench and leading the former doormat New York Knicks to seven consecutive victories, he was spending nights sleeping on his brother’s couch in a small apartment in New York City.
Despite being the High School Player of the Year in the State of California, Jeremy Lin went unrecruited by any major schools and ended up going to and subsequently graduating from Harvard with a degree in economics and a 3.1 grade point average. Despite being first-team all IVY League, Jeremy Lin then went undrafted in the NBA draft and had to sign on as a free agent with the Golden State Warriors in 2010 and after mostly sitting the bench ended up with the New York Knicks at the start of the 2011-2012 season where, at the beginning he sat the bench until opportunity knocked.
Having scored at least twenty points and dished out seven assists in his first six starts, Lin is in very select company that includes only fifteen players since the 1985-1986 season. Now, the toast of the town, Lin’s nearly unbelievable story is one of rags to riches (at least for the time being) and can teach all investors some valuable lessons.
FIRST and foremost, always think critically. Think for yourself. Don’t believe everything you see, hear or read. Don’t assume anything. Jeremy Lin is the first American born NBA player of Chinese or Taiwan descent. Perhaps this clouded the perception of the scouts who evaluated Lin. Similarly there were those investors a few years ago, whose perceptions of companies like General Electric, Intel, IBM and Citigroup were clouded. They thought that if they just ‘bought and held’ without consideration of almost anything, they would be alright. That didn’t happen. Investors must always look to upgrade their portfolios regardless of name.
SECOND, stay humble. Arrogance leads to nothing good when it comes to investing. Always believe that you don’t know everything about your investments. Continue to look for information and always believe there is something negative lurking around the corner. Try to find out what that “something” might be.
THIRD, stay hungry. Stay on the offensive. Don’t settle for average. Stay on the lookout for better ideas. Always look to upgrade your portfolio to something a bit more appropriate for your needs. That doesn’t mean that you should be impatient or trade-happy. It means that you should always have your antennae up for better ideas. Don’t ignore them.
FINALLY, within reason and moderation, give your ideas a shot. Have a strategy for selling as well as buying. The Knicks gave Jeremy Lin a shot and then took a wait and see attitude. As long as he was performing they kept playing him. Stocks work the same way – as long as the holding is working let it go, all the while continuing to learn about the holding, it’s positive and negative qualities. However, should the holding begin to go down, have a plan and execute it.
THE BOTTOM LINE – When investing, think critically, stay humble, stay hungry and have a strategy.