In my misspent youth of taking everything way too seriously, I finally cracked and spent one fabulous summer studying acting in New York. A lark to be sure, yet to this day, those six short weeks of training at The Neighborhood Playhouse eclipse any formal schooling I ever got.
In another world, one in which successful actors could be home-bodies and shuffle around in t-shirts, sweat pants and thick woolen socks, drink way too much hot milky tea, and call it a night by 10pm, then, yeah, I would take a shot.
One thing I learned is, acting is a lot harder than it looks. It’s relatively easy to ACT. Think of the great over-actors like Jack Nicolson or Al Pacino chewing up the scenery. Watching their films today, it’s like, ech, that’s a bucketful of acting there fellas.
At The Playhouse we studied the Sandy Meisner technique. This involved sitting across from another student in the middle of the room and repeating the same words to each other.
Trust me, it’s as crazy-making as it sounds. But it’s a great technique for deep listening, and for building something—word-by-word— out of nothing.
Last week, The New York Times ran a Q&A with Emma Stone and Eddie Redmayne, both Academy Award nominees. Stone recalled working on a scene with the Australian actress Toni Colette some years’ back. After an hour, Colette asked Stone to take a look at the playback. What Stone saw gave her a shock. She suddenly realized why she was not getting film work. She was flat-out, googly-eyed ACTING. The best acting advice she got was, “teaspoons, not buckets.”
“Teaspoons, not buckets.” That’s damn fine counsel for just about any endeavor, not just acting. So often we go for the max, not realizing that the extra effort doesn’t translate into greater returns; it may even diminish them.
This “buckets” approach is prevalent in investing. Most retail investors, and even a few professionals, want to make a big kill. This is reflected in macho investment lingo. There are doubles, and ten-baggers. No one ever talks about the twenty-five-percenters. But, I mean, if you got a twenty-five-percent return on your investment, wouldn’t that be great? By comparison, official inflation is running at around two-percent, and long-term equity returns come in around seven-percent.
I think the average investor should take the teaspoon, not buckets approach to their portfolios. Instead of sticking their necks out, either by taking on outsize risks in highly speculative investments, or by holding on to winners too long, hoping for that last bit of price increase, they can miss out on the impact of teaspoons of positive returns.
You may have noticed that investment analysts are quick to advise what to buy. They are less forthcoming on what, and especially, when to sell. They leave that important part up to you because they don’t want to publicly diss a company and risk being cut-off from the juicy commissions that come with financing deals. Keeping the “teaspoons, not buckets” approach in mind, will give you the discipline to not be so greedy and to crystallize profits before they vaporize.
You don’t have to play to the back of the room. Just hit your marks by picking your exit price before you buy.
And the winner is…