If we want to live a miserable and unfulfilled life, all we need to do is chase what other people have, and we will hit our mark every time. Desiring other people's possessions and achievements makes it impossible to live a good life, and that's why God warned us about coveting in the first set of laws that He gave Moses. In the 10 Commandments, God said,
“You shall not covet your neighbor's house; you shall not covet your neighbor's wife, or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbor's.”
Exodus 20:17 ESV
Coveting other people's possessions and achievements can lead to murder, theft, adultery, depression, debt, and so many other ruinous things.
One area where I see the spirit of covetousness running rampant is in the stock market, because stock investors are always comparing themselves to a benchmark or their peers. A company's stock price can triple in 5 years, but if other companies in the industry go up 5x, investors in the 3x company will become angry and depressed, especially if their friends own the 5x stocks. They will lose sight of the fact that their money tripled in 5 years, which is better than what they would have earned in a savings account.
I think trying to outperform benchmarks and other companies makes investing more complicated and stressful than it needs to be. Investors should set their own financial goals, do what they can to meet them, and enjoy the journey.
This week I read the letter Elliot Associates sent to Texas Instruments about their underperforming stock. In the letter, Elliot wants Texas Instruments to be more flexible with their spending so their free cash flow and stock price will increase. Click here to read the letter Elliot sent to Texas Instruments
On page 5 of their letter, Elliot says Texas Instruments has underperformed their benchmark and peers over a 2, 4, 6, and 10 year period.
Chart from page 5 of the report.
Their chart overlooks the fact that Texas Instruments has made their shareholders some good money over a 2, 4, 6, and 10 year period. On an absolute basis, their returns are not bad.
2 Year Return: 23%
4 Year Return: 88%
6 Year Return: 100%
10 Year Return: 399%
Most investors would be happy with these type of returns. Frustration only sets in when they start looking to the left and to the right.
I hear people say that investors should buy index funds and avoid picking individual stocks because most investors underperform the market. But if the market averages 10% per year and a stock picker gets 7%, should we condemn them as a bad investor? I don't think so. If their required return was 7%, and they enjoyed the ride, then they were successful in picking stocks.
President Theodore Roosevelt once said, "Comparison is the thief of all joy." I guarantee our lives will improve 10x once we stop craving what other people have and start enjoying what God has placed in our hands.
Contentment is free and available to everyone, but most people don't have it, and most people won't find it because our desire to want more is so strong. Break free from the power of covetousness and enjoy life today.
Email me if you have any questions: ov@myinvestmentdreams.com
Stay strong, stay blessed, and God willing, I will see you next week.
But godliness with contentment is great gain, for we brought nothing into the world, and we cannot take anything out of the world. But if we have food and clothing, with these we will be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.
1 Timothy 6:6-10 ESV
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