How do you learn to be an investor? At the most basic level, you start by buying a share or some other asset, and then you see how that asset performs over time.
In the longer term, you buy other assets in different situations and gradually learn how to pick assets that are likely to go up in value.
At least, that is the theory.
Let's compare that with how you learn to play tennis.
That involves someone hitting the ball to you and then you hit the ball back and see where it goes.
You do this time after time, in lots of different situations and gradually you learn how to hit the ball to get it to go where you want it to.
In a way, the two look similar, but the difference between them is the frequency and reliability of the feedback you are getting.
You can hit a tennis ball hundreds of times in an hour and you can see where it has gone in a second or two.
When it comes to investing, though, it can take years to find out whether you were right to purchase a particular share.
You will never have as many practice investments as you could have practice tennis shots.
On top of this, when it comes to tennis, there are lots of ways that the environment is controlled.
The court, the balls, the surface you play on, the rackets, these are all regulated and standardized.
If you are able to play tennis well in one place, you should be able to play tennis well anywhere.
Now that doesn't sound like how things work in finance, does it? Since the American housing market started heading downwards in 2007, the financial markets and the economy have been behaving in a way that is incomparable with anything since the Great Depression.
Even the most experienced of fund managers and analysts have been facing a situation they simply haven't been through before.
To stretch the tennis analogy, it is like asking the world's best tennis players to go back to using wooden rackets or a solid ball and still play to the same standard.
All this means that the feedback that you are getting from your investing is fundamentally unreliable.
If you did somehow manage to make an investment which turned out exactly as you expected, you could be faced by an apparently identical situation at another time and see a totally different result.
Any lessons you learn from your investing have to be non-specific and treated with a degree of uncertainty because you simply don't know how much you can apply more generally from a particular set of events.
Since it takes you much longer to get feedback and the feedback you do get is unreliable, it is much harder to get good at investing than it is at other things.
The good news is that the same is true for everyone else as well, but most of them don't know it!