Finding the Sweet Spot

When it comes to sports the Sweet Spot is the place where a combination of factors results in a maximum response for a given amount of effort. In tennis, baseball or golf such spot is the location at which the object being struck, absorbs the maximum amount of the available forward momentum and rebounds away from the racket, bat or club with a greater velocity than if struck at any other point.

matchpoint

Economically speaking we could define a sweet spot as “the point at which an indicator or policy provides the optimal balance of costs and benefits.”

As for investing it would be the point where a particular asset has reached it’s lowest price while keeping all it’s potential value. Our goal is to identify those sweet spots.

Value-Investing

Sweetspot

“Be fearful when others are greedy and greedy when others are fearful” Warren Buffett

However that’s far from being an easy task, as individual investors we should remind ourselves that we are competing with everyone else around the globe and against the best market actors: hedge funds, mutual & sovereign ones, professional traders, investment banks, HFT and so forth. Thus why we should strive to find our own particular niche and place our money carefully. While economy isn’t a zero-sum game investing sort of is, for every buying possition there must be a selling counterpart in order for a transaction to be performed and viceversa, let’s always keep that in mind.

  • But that’s all rather more philosophical than pragmatical and you haven’t really said anything new, have you?

Indeed you are right, I haven’t said anything new and perhaps most of what I have said above is more philosophical than pragmatical but I believe that should be the starting point for everyone who’s willing to invest their money and thereby time, we create a growth mindset, then we settle our goals and draw a plan in order to reach them.

  • My Sweet Spot isn’t yours

We could make as many definitions of sweet spot as many individuals exist because the reality is that my goals aren’ts yours and the amount of time, work and cost of opportunity one individual is willing to assume respect to another totally differ.

So whether your goal is to increase your capital, achieve some passive way of income or reach financial independence you should start by defining your flawless particular spot and trace a plan according to it.

  • What’s the purpose of this blog?

On this blog I’m going to express my thoughts and ideas regarding investing, I’m going to show my musings and analysis of the incoming economic trends, hopefully somebody will find them interesting and some debate will be generated, criticism is always welcome. I’m also going to share stuff from other authors that I find interesting. I’ll probably be writing in both English and Spanish being the latter my mother tongue.

Remember I’m just another amateur so everything you read here should be taken with a grain of salt.

 

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1 Comment

  1. Lionel Messi

    Good article, thank you

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