Industry knowledge after you retire

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
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TomB19
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Industry knowledge after you retire

Post by TomB19 » 12 May 2017 16:12

I'm fortunate to have a decent amount of knowledge in a couple of areas. This knowledge comes from working in industry and learning the nuances of the technical, financial, and political influences.

Like everyone, we've done extremely well the last few years.

I wonder how long my insights will remain valid after I retire. A couple of years? 5 years? Surely, not 10.

I'm 50 so I hope to have some retired years with no valid industry knowledge.

Do you move toward index investing as you lose confidence in your knowledge? Do you trust the trajectory of a handful of companies and stick with them?

I know I won't get the extreme returns I've been getting the last few years forever, even if the market remains strong indefinitely.

I would appreciate any insight or discussion in this regard.

TomB19
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Re: Industry knowledge after you retire

Post by TomB19 » 12 May 2017 16:20

Further...

My wife has put full trust in me with our investing. We've both worked like animals to get to a position of being able to contemplate retirement. Life has served up a large helping of good fortune, also.

I take her trust as seriously as I take anything. I don't want my arrogance and/or ignorance to cause her hardship. I plan to change into a more conservative gear at some point in the near future.

At the moment, like everyone, everything we touch turns to gold. It would be real easy to make some bad decisions in the future while being drunk on former glory. A mistake I would very much like to avoid.

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AltaRed
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Re: Industry knowledge after you retire

Post by AltaRed » 12 May 2017 16:49

After 11 years of retirement, I've come to these observations on the differences in investing acumen before/after retirement:
- One loses some intimate currency in the specific industry in which they were employed, i.e. the competitive comparisons and where there may be market mispricing and thus an investing (trade) opportunity to make some bucks
- OTOH, one gains a broader perspective (objectivity?) of the forest instead of the trees in the specific industry in which one works, i.e. maybe the macro-differences are more relevant than micro-knowledge of the inner workings
- One has more time to look at the big picture of one's portfolio including global trends and contributing factors on portfolio returns post-retirement, potentially resulting in better investment decisions
- One has more time to look more objectively on what is most important in one's life and whether to take financial markets quite as seriously (reactively).
- One learns to think less about 2 decimal places in gains/losses in index/stock movements in withdrawal mode. Hint: Decimal places are stimulants for accountants and engineers, but not investors, i.e. winning is not about a 6.1 vs a 6.2 return than it is about what one does with the return one gets.

Probably many others as well, but I can say I have overall made better investing decisions post-retirement than I did pre-retirement.
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ghariton
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Re: Industry knowledge after you retire

Post by ghariton » 12 May 2017 19:10

AltaRed wrote:
12 May 2017 16:49
I can say I have overall made better investing decisions post-retirement than I did pre-retirement.
Certainly true for me,

A couple of extra points. When I was working in a fairly specialized area, I thought I knew a lot about it. Maybe I did, maybe I was fooling myself. But I became overconfident, which led to a near-disaster in 2001. Not knowing an industry so intimately any more means that I have been drawn to broad diversification, and that's a very good thing.

As well, I find that with age and maturity (if not wisdom), I take things in stride more easily. Dips in the market don't bother me any more, and even the 2008 bear market was merely unpleasant, not panic-inducing. I now trust my financial plan, and so I worry a lot less.

Third, I no longer worry that I am missing something important, whether that be a hot security, or a new investment style, or some other "better" method. I'm satisfied with the returns I have been getting, and see no reason to chase after improvements. Therein lies peace of mind.

George
The plural of anecdote is NOT data.

kumquat
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Re: Industry knowledge after you retire

Post by kumquat » 12 May 2017 21:59

I'm not convinced that I know any less (or any more) about anything than I once did. Many years ago, though, I knew a hellava lot about everything.
I don't intend to offend anyone, that part is just a bonus.

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kcowan
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Re: Industry knowledge after you retire

Post by kcowan » 13 May 2017 11:37

I had a two-phase evolution. I gradually got out of stuff I knew intimately while observing what factors lead to their outperformance.

I still hold key positions but have grown into other sectors by learning the fundamentals that drive them. This has kept me out of the ditch while learning what makes a difference. There are some sectors like healthcare that I have avoided because could never get a feeling for differentiators.

My starting point was tech and I evolved into banks and energy. Enercare and New Flyer Industries have been recent successes, based on their sectors. I was concerned when Obama mentioned that all the buses were from Winnipeg, but so far no problem! They just got another order from NYC.

we have held onto some solely for the ability to pay dividends. These are easier.
For the fun of it...Keith

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Re: Industry knowledge after you retire

Post by gaspr » 13 May 2017 22:58

Knowledge has never been easier to acquire than it is today. What concerns me the more is the fact that as our cognitive abilities decline, our confidence goes up! Not a good combination and probably impossible to recognize in ourselves.

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Flaccidsteele
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Re: Industry knowledge after you retire

Post by Flaccidsteele » 14 May 2017 02:25

TomB19 wrote:
12 May 2017 16:12
Do you move toward index investing as you lose confidence in your knowledge? Do you trust the trajectory of a handful of companies and stick with them?
I never had much "industry knowledge". Personally I don't think industry knowledge would have made any significant difference for me. Maybe I would have done better if I had some. Or not. I'll never know.
Retired @ 40 after reading Munger/Buffett. I avoided a fragile retirement by avoiding conventional volatility management (diversification, re-balancing and asset-allocation). "Put 90% in a very low-cost S&P 500 index fund...the long-term results will be superior" - Warren Buffett

hamor
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Re: Industry knowledge after you retire

Post by hamor » 14 May 2017 07:30

Thinking one knows something others don't is one of the common biases, I'd go as far as to say 'delusions'.
Unless one truly has some insider knowledge, in which case the legal aspect of it comes to play.

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AltaRed
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Re: Industry knowledge after you retire

Post by AltaRed » 14 May 2017 09:29

hamor wrote:
14 May 2017 07:30
Thinking one knows something others don't is one of the common biases, I'd go as far as to say 'delusions'.
Unless one truly has some insider knowledge, in which case the legal aspect of it comes to play.
Industry participants often have more intricate knowledge of the industry they work in than investors at large. That may allow them to make more informed decisions on investing in specific industry participants. That is not insider knowledge - which by definition would be specific to profiting from upcoming moves of a specific company.

I could argue that I could have made better picks of oil companies, pipelines, and energy infrastructure when I was employed in the O&G industry. Maybe...but maybe not if I couldn't see the forest for the trees. Meaning that I could have had a bias towards energy industry investing, in which case I could have been doing myself more harm than good.

My belief is that once one has left the industry in which one has been involved, one has a better opportunity to become more objective about that industry relative to the market at large, and overall is likely to make better investing decisions for their portfolio.
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kcowan
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Re: Industry knowledge after you retire

Post by kcowan » 14 May 2017 10:04

AltaRed wrote:
14 May 2017 09:29
My belief is that once one has left the industry in which one has been involved, one has a better opportunity to become more objective about that industry relative to the market at large, and overall is likely to make better investing decisions for their portfolio.
:thumbsup: The distance tends to remove the blinkers.
For the fun of it...Keith

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Re: Industry knowledge after you retire

Post by Shakespeare » 14 May 2017 10:10

Not only that, you have more energy to focus on the Rest Of The World. :wink:
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Industry knowledge after you retire

Post by hamor » 14 May 2017 19:55

Industry participants often have more intricate knowledge of the industry they work in than investors at large. That may allow them to make more informed decisions on investing in specific industry participants.
Didn't work all that well for dot com. I can see how OG is different somehow, but I still think it dangerous road.

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