Practical Lessons for Your Financial Life (Collection)

Chapter 5. Do What You Know and Recognize What You Don’t Know

One of the strongest pieces of advice I can give an investor is to do what you know. To illustrate this, I’d like to share a cautionary tale about what happens when you don’t. Meet Jake.

Jake: I used to be interested in a lot of different aspects of boating, and I had some friends—also orthopedic surgeons, like me—who shared that interest. One of them approached me and suggested I participate with five other physicians in forming a small company. This guy’s brother owned a marina in South Carolina and talked a good game. The whole idea was that a radical design had been created by a very famous naval architect. It was a high-speed fishing boat with a special kind of hull that would ...