Position in Investing
The investing analogy to position in Texas Hold’em is based on the time that you take after initially considering investing in a particular security until you actually make the investment in the security. If you take very little time to make your decision you are effectively putting yourself in the equivalent of an early position Texas Hold’em player. You will have less information with which to make a well-studied investment decision regarding the value of the security and whether an investment provides significant upside.
Investors who are in “early position” are like business entrepreneurs – sometimes they can strike big time but they generally get overrun in the white hot competition of an early stage market. In the stock market it is safer and more profitable to wait and see what happens with newer stocks otherwise you may end up taking on too much risk. It is even more important to consider your investing “position” in the early stages of your investing career when you are more likely to make mistakes because of a lack of information.