Why Retail Investors Should Focus More Time On Self-Improvement Rather Than Stock Picking
Most investors focus too much time trying to find a great business and not enough time building the ability to hold it.

It's easy to read an article about how good Google is. It's not easy to think about all the mistakes you are making that are holding you back from rapid improvement. Since humans are slaves to their emotions it's easy to allow them to guide us, even when we don't need them to!
When you fail to learn to control emotions, you end up:

  • Selling too early

  • Focusing on the short term

  • Selling when the price decreases

You will never achieve great wealth using this strategy

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You'll end up being the person who sold Amazon for a 20% profit when you could've made 100x profits.

Everyone will make mistakes of omission in investing. Not everyone learns from these mistakes.

Great investors have high levels of conviction and emotional awareness. Buffett held Berkshire for 3 separate drops of 50% or more. He did this because:
  • He understood what he owned

  • He's a master at controlling emotion

  • His levels of self-reliance are off the charts

Look, I'm not telling you to stop studying new business models and adding more to your circle of competence. But all that analytical work will be completely wasted if you aren't constantly trying to make it easy to hold onto your ideas through thick and thin.

If you don't have conviction, patience, and equanimity, spend some time learning how to develop those qualities.

Approach investing through a lens of continuous self-improvement.

When you emphasize self-improvement in investing through the lens of emotional control you unlock all sorts of benefits. You'll make way more money because you'll make fewer mistakes. You'll worry less about stock price volatility.

You'll find the market is a place where you can challenge yourself and are incentivized for winning that challenge.
Jazzi Young's avatar
So true. We've always maintained the investment journey is a voyage of personal development.
Learning the mechanics of investing is easy. That information is freely available.
Learning to regulate your behaviour, manage your emotions and practice clarity of thinking is where the real mastery is found.
Your emotional intelligence quotient (EQ) is much more important than your intelligence quotient (IQ).
The Thinking Investor's avatar
@jazziyoung Great points!

You can be the best stock analyst in the world. But if you don’t have the mental makeup to manage your emotions you’ll never get the full upside of being a great stick picker.

Conor Mac's avatar
Could not agree more, well said.

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