Yogi Berra on Investing

Lawrence Peter Berra is well known and well loved among fans of baseball. As a player, coach and/or manager for the Yankees, Mets and Astros between 1946 and 1989, "Yogi" became famous for, among other things, his "Yogi-isms" -- things he said that were, perhaps paradoxically, somehow both ridiculous and also kind of true.

As I read through a list of Yogi-isms the other day, I noticed that many of them could relate to investing. Here are a few, along with my modest thoughts about them:

"So I'm ugly. I never saw anyone hit with his face."
This is a wonderful point. When it comes to investing, too many people never get around to actually participating, often because they dwell on some silly excuse, such as "I don't have enough money" or "I'm not smart enough." Well, you don't have to be rich or a brain surgeon. You can invest small sums regularly (small meaning as little as $25 or $50 per week or month) into companies such as Coca-Cola (NYSE: KO  ) , Home Depot (NYSE: HD  ) , Wal-Mart (NYSE: WMT  ) and Intel (Nasdaq: INTC  ) and over many years they can grow to significant sums. Learn more about "Drip" investing if this interests you. (Here's our Drip discussion board -- take advantage of a free trial to our online community.)

If you feel too uninformed about investing, first understand that you're not alone -- and then begin to simply learn. Read Fool books and other books, such as those by Peter Lynch. Read Warren Buffett's educational annual letters to shareholders. (And at the risk of repeating myself a bit, try hanging out in our online community, where thousands of friendly people are happy to answer your questions.) Oh, and consider checking out our new suite of stock newsletters, too -- you may learn some things seeing how and why we've chosen the featured stocks.

"When you come to a fork in the road, take it."
A lot of success in investing comes from taking action. Some people come to a fork in the road, such as a decision to make regarding whether to invest in a regular or Roth IRA, and end up paralyzed by indecision. Years later, they may realize that they would have been better off investing in either IRA instead of doing nothing. Other people see an investment opportunity when a stock they really believe in takes a tumble. But instead of taking action, they sit on the fence and watch it slowly return to previous levels.

"The future ain't what it used to be."
This critical concept is lost on too many people. We at the Fool, including me, often recite the stock market's historical average rate of return, which is about 10% to 11% per year over most of the last century. That's a very good thing to know. (After all, many uninformed people think it's more like 3% or 40%.) But it's also important to understand that the future, the next 10 or 20 years, will probably differ a little and maybe a lot. Over your personal investing period (which might span the years between 1986 and 2031, for example, the stock market might return an annual average of 8% or 10% or 12% or something else. You should never expect that any particular return is guaranteed.

"If the world were perfect, it wouldn't be."
We may wish that everyone had perfect information about the stock market and its component companies, but if that were so, you'd have no advantage over anyone else. If every company behaved perfectly and executed its strategies perfectly, it would be hard to find promising opportunities. If there had never been a Tylenol scare back in 1982, then many savvy investors who saw an overreaction to a short-term problem would have lost the chance to buy Johnson & Johnson (NYSE: JNJ  ) at a low price.

"Baseball is ninety percent mental. The other half is physical."
Investing is also mostly mental. But there is a bit of a physical element, too. You may need to physically restrain yourself from calling your broker to sell stocks if the market plunges one day, or from buying the stock of a high-flying company with a great story and no track record.

If your neighbor Stan keeps stopping by with a hot stock tip from his brother-in-law, you may need to get physical and slap Stan. Hot stock tips are too often just hot air. It's best to do your own research and make your own decisions.

"You can observe a lot just by watching."
This one reminds us to watch. And think about what we see. One good kind of watching is to set up a mock portfolio, where you pretend to buy the stocks you would like to own, and then you track your "investments'" progress over time, seeing how good your picks were and how the stocks react to various company news and other developments. (You can set up an easy-to-monitor online portfolio here at the Fool.)

"You've got to be very careful if you don't know where you are going because you might not get there."
Do you know what your investing goals are? If not, as Yogi points out, you may be in big trouble. You need to determine how much money you'll need in retirement. You need to figure out how much to amass to cover Junior's college expenses. You also need to figure out how you're going to reach your goals, once you figure out what they are.

"We made too many wrong mistakes."
It's actually helpful to make the right mistakes in investing. It can be good to lose a little money early in your investing career because you can learn from your mistakes (if you're watching) and not lose larger sums later. Common mistakes include being too greedy and waiting for a stock to rise or fall a smidgeon more before buying or selling, or experimenting with penny stocks or commodities.

"I can see how he (Sandy Koufax) won twenty-five games. What I don't understand is how he lost five."
On the topic of mistakes, remember that every investor makes them. Even Warren Buffett has admitted to his share of gaffes.

"It gets late early out there."
Don't put off learning about investing and taking action. It's rarely too late to start, true, but the earlier you start, the more money you can usually make.

"It's like deja vu all over again."
Many things in investing happen again and again. Bull market. Bear market. Another bull market. Another bear market. An accounting scandal. A corporate-governance scandal. Hype inflating a bubble. Reality piercing a bubble. Learn to recognize various signs and events, and be on the lookout for their recurrence.

"How can you hit and think at the same time?"
This reminds me that investing should never be all action. If I'm just trading and trading (even with a lot of patient waiting in between), but am not reading and thinking and learning, then I'm probably not going to do as well as I might.

"The game's isn't over until it's over."
Here, Yogi points out that if you're alive enough to be reading this, you probably still have time to invest -- or to make some smart decisions about your money.

"I never said most of the things I said."
Finally, to anyone who doubts whether Yogi really said all these things, I offer the quotation above.

Thanks, Yogi, for the sage advice!

When a softball team is desperate enough to needSelena Maranjian'sservices, she can be found in right field, hoping the ball is sent to left field. (Though she's also been accused of being out in left field.)For more about Selena, view her bio and her profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool is Fools writing for Fools.


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