Monday, April 14, 2008

How Many Robins?

I have a bird feeder which I fill with the usual wild bird seed mixture. I do confess that I tend to fill it in good weather rather than in the middle of a snowy winter when the birds really need it. Anyway, it is a rite of spring to get some seed mix into the bird feeder and watch for the birds to come back to my yard after the winter. I'm sure that many of you do the same thing. I don't talk to the birds, but sometimes I bet on them. Right now I am ready to bet on the number of robins that will eat at my bird feeder today. My bet is zero. The reason is that robins don't eat grain; they very capably find and eat worms. They are meat eaters. (Just as there were diet differences among the different types of dinosaurs that were ancestors of the birds.) The point of this discussion is not to show what I know about birds but to remind you that in placing any bet or making any decision you will have better chance of success if you bet on something for which you have prior knowledge. It is always better to own stocks of companies for which you know something about their businesses rather than companies that you know by name only. Likewise, you are better off starting up a company in a field in which you have worked or which you have studied rather than a business which sounds interesting but about which you know nothing. Knowledge is power, and that's why you hear the expression, "The smart money is betting on ______."

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