Warren Buffett is often quoted comparing investing to baseball, with the one difference in that there are no called strikes in baseball. As a batter, you can let as many pitches go by without swinging. Even those right down the middle of the plate. The only thing you lose is opportunity cost.
That’s a great analogy, however there is one problem with that analogy, you need to have a bat to swing. If you don’t look at a company, your hands will be empty when Mr. Market, the pitcher, throws you a “fat pitch.” And that’s the case with me when it comes to Kirkland’s (KIRK). You see, it was about 14 months ago when I first saw the idea, and to this day I’ve only done cursory research on the company.
Kirkland’s was written up on Value Investors Club in September, 2008. Non members got access to the idea in early November, 2008. At that point, the write-up seemed interesting, but I couldn’t imagine buying a housing related retailer in the middle of a recession caused by housing. The stock had declined about 20% from the time of the write-up, which made me think that it wasn’t as good an idea as it seemed (boy, was I wrong). And it had doubled from the lows already, so greedy me wanted to buy it under $1. By not being prepared, and not buying, I missed an almost 10 bagger in a year.
Once in a while when I completely miss a golden opportunity, I like to go back and see what the situation looked like at the time, to make sure that when the situation presents itself again, I’ll be ready to swing.
