scorecardresearch4 investing mantras by the NBA legend Shaquille O'Neal

4 investing mantras by the NBA legend Shaquille O'Neal

Updated: 29 Mar 2023, 09:32 AM IST

Be it a game or business, adopt a strategy that does not fail you. However, if you are a novice, check what others are doing and then decide how you would want to go about it. Learning always helps, especially, when you learn from how and what the best men around you do.

Investing mantras by the NBA legend Shaquille O'Neal

Investing mantras by the NBA legend Shaquille O'Neal

Not all people know how to handle their finances. One way is that they resort to handholding by seeking the guidance of personal financial analysts. Another alternative way is learning from what successful investors do and ape their investing style.

Shaquille O’Neal, an American former professional basketball player who is also a sports analyst on the television program shared how his early investments in some popular technology companies helped him amass an impressive portfolio containing stocks of some major businesses including Apple, 24 Hour Fitness and nightclubs in Las Vegas.

Pegged to have a net worth of 450 million dollars in 2023, he was also the highest-paid NBA player of his time.O’Neal has been quite vocal about his investing principles and how he follows Amazon founder and CEO, Jeff Bezos.

Investing in innovation

When asked how he managed to turn around his fortune, O’Neal was quick to share how he draws inspiration from what Bezos does, which means that his investment strategy revolves around putting his money in businesses that can change people’s lives. This strategy helped him gain at least four times the money he allocated to his investments.

First believe, then invest

Do you just put your money based on hearsay? Many people succumb to rumours or comments glorifying certain investments without realizing how their decisions would help grow their investments. O’Neal firmly puts forward how his beliefs matter when it comes to investing. If he does not understand a particular business, he does not invest in it, no matter how enticing it may sound.

Some businesses look excellent on paper but may not be worth investing in if evaluated closely. Not all businesses are about immediate returns; there are some that will take a long time but will be worth every penny that you put into them. Sticking to what you know and trusting your knowledge about businesses is important. The underlying idea of every investment is “Invest in things that you believe in, and not in things that others believe in”.

Evaluate before you invest

Agreed that your circle of competence must be limited, but it is worthwhile if you assess businesses before selecting them for investments. Many people lack the uncanny ability to correctly assess businesses based on the previous year’s figures. The idea must be then to focus on selected businesses though not only may serve your purpose. It then makes sense to evaluate those companies or businesses within your circle of competence.

You will then get a fair idea of where your money is going, how it would be invested and how much estimated time it would take before you see a turnaround in the businesses included in your portfolio. More than assuming the size of the circle, being able to gauge its boundaries or limitations is of utmost importance to make the right decisions. As Warren Buffett rightly says, “Stick to what you know. Defining what your game is – where you’re going to have an edge – is enormously important”.

Keeping a long-term perspective

Don’t be in a hurry to earn what you have invested. Be willing to adopt a ‘buy and hold’ approach. If you are not willing to hold a stock for a decade, do not even think of holding this stock for even 10 minutes. The ‘Buy and sell’ approach does not always help unless you are exceptionally lucky or have some magic potion that allows you to time the market ideally. If you are investing in a business, you must be willing to lend it enough time for it to grow and yield considerable returns in sync with your financial goals.

Investing is not a mere game. It is a well-thought process that a well-planned strategy must back. If you are short of investment ideas, it always helps if you emulate what successful entrepreneurs do.


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First Published: 29 Mar 2023, 09:32 AM IST