A. I had always thought that to be a good investor you needed to hit a lot of singles and not strike out often. I was wrong. Investing, especially in small companies, is a home-run-hitter's game.
Q. When did you learn that?
A. Late '70s, maybe. The point is, 99 percent of what you do in life I classify as laundry. It's stuff that has to be done, but you don't do it better than anybody else, and it's not worth much.
Once in a while, though, you do something that changes your life dramatically. You decide to get married, you have a baby - or, if you're an investor, you buy a stock that goes up twentyfold.
So these rare events tend to dominate things. At Acorn, for example, I might have owned 300 stocks at any given time; most disappeared into the laundry basket.
But 10 might go up many times in value, and they made all the difference.
Look, how many home runs did Babe Ruth hit in his best year?
Q. Sixty, in 1927.
A. How many times did he strike out that year?
Q. Darn, I used to know that. I think it was...
A. Why don't you know?
Q. Uh, because when you hit that many home runs, it doesn't matter how many times you strike out.
A. Exactly. You're a great straight man.
Q. Thanks. So how many times did Babe Ruth strike out?
A. Don't know. Not interested. It's the winners that count. You want to have big positions in your winners, and the losers are trivial, eventually.