Improving as an Investor part 2 of 2

I did a post on improving as an investor..and this is the follow up post. Read this before you go further

Improving Investing skills part 1 of 2

As Mr. Buffett says ‘have an internal scorecard’ – be happy internally with what you are doing. Including investing. If your conviction is right, you can be confident. The market has an amazing capacity to make you look stupid for very long periods of time. You need to overcome that – and that can come only from amazing reading and super self confidence. Imagine in the 1998-2000 tech boom, the press made WB look like STUPID. The market was up and the Berkshire portfolio was down about 40% – or therabouts (writing from memory not from facts, but do look up the data). He survived because of his conviction, did he not?

If you cannot stand the pressure of the social media, stay off. It can cause havoc with its chat rooms, Bill Cramer (who else?), Arnab Goswami, …are all here to disturb your Vipassana. There is no seeking the truth on the social media – it becomes a turf battle not a place for some great investment intellectualism. I have walked into rooms and got advice from kids about how to trade the equity market. Of course they did not know me – but I find these days even that does not matter. So in some places I need to play the “do you know who I am card” to run away or talk ‘mural paintings’ and say “all this money talk bores me”.

Use FB, Twitter to post some dramatically wrong, different, ideas and see the response. Trying to get people to pick holes in your arguments is also useful. On my blog I do get a lot of feedback about it, but does not bother me. One person wrote in to say “all that is there in your book is already there on your blog – why pay money’. Fair question? well, well. Once you have Google why write a blog? I am sure you will find you do not need blogs, calculators, etc. !!

Maintain an Investment diary, that is very important. In a physical mode, write down your own predictions. Whether it is about the sensex, nifty, oil, US $, best share to buy, what to sell short. Do both for a quarter and for a year. Keep predictions of others in a file (save it, it may be removed if it is embarrassing). See how confident you are about these predictions.

Keep seeing some of that on a regular basis and some on a not so regular basis.

On 31st December 2017, you will not say “I knew this would happen”. True for all of us. It also shows us how we get a few things right by chance – I got the ride from 21000 to 9000 right. I did enter at 9k and 10k very confident that I would see 12000 in one year, I think I saw 15. Just sheer luck. I anyway had money for the long term AND was an equity fan who had luckily sold some shares at 21000. Not because the index was high, but the pe of some of those companies were not justified.

Find out how the biases hit you, that is a good move to improve as an investor. Remember in this post we were talking of Hindsight bias.

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One Response to “Improving as an Investor part 2 of 2”

  1. True,

    The market has its own mind…

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