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Twitter Wasn't Built For Investors
On Fintwit, there's no concept of 'verified performance.'
Most people don't realize how pernicious this is.
There's a cognitive bias called 'Self-Serving Disposition' that we all have naturally— We believe our failures are situational but our successes are our responsibility.
"$ROKU is down because of supply chain issues and the #UkraineConflict— not because I made the wrong call" (— Me)
This bias is responsible for the blind spots that keep us making the same insane investing mistakes over and over again.
It often takes a friend holding up a mirror for us to realize that we're falling pray to self-serving bias.
But the kicker is that Twitter doesn't have any mirrors. There's no concept of verified portfolio performance.
Now you have two problems: your blind spot, and an absence of the tool you need to realize you have it.
The solution (the mirror): Portfolio returns built-in to the platform. This allows you to see the world for how it really is, not how others spin it to be.
If you aren't proactive about fighting it, self-serving bias will turn you into an insular, defensive, cherry-picking investor.
That's bad for the community, and it's even worse for you.
Imagine a gym with no weights, where people just talk about how strong they are. That's Twitter.
If you want to get stronger, go to a gym where people track their progress. Where' there's actual weights. Where people get stronger on good days and bad.
Surround yourself with people capable of learning and outgrowing their biases. @joincommonstock
Inspiration for this post: some great tweets by @parrot and @youngmoneycapital
Very well said Nathan
Nailed it. Having a public portfolio really does change how you approach things. I think it adds a level of stress to have your mistakes seen publicly but in the end this features makes you second guess yourself…. which is a good thing.
@pat_connolly Getting used to eustress is a great habit in life. Especially helpful in investing.
Couldn't agree more - I don't have twitter, Facebook etc. For those exact reasons and since joining @commonstock I've been greeted with nothing but encouraging help, general advice to improve my knowledge and community sharing their ups and downs in real-time... its been brilliant for a complete novice like me!
@mcol23 Love that— and things are only getting started 💪
@nathanworden 100% can't wait to learn a lot more
Amazing memo Nathan! Really liked how you took concepts originally derived from psychology and applied it to investing. An investor's tendency to attribute positive outcomes to their character, but attribute negative results to external factors can be fatal. Self-awareness of one's decisions here is key.
In this respect, the special features of Commonstock add a layer of transparency and accountability.
@joeyhirendernath ^exactly. The self-awareness piece is crucial. And it doesn't get cultivated without conscious pursuit.
@joeyhirendernath I think psychology & behavioral finance are under rated and under utilized. I don’t use much technical analysis investing, but going against the herd doesn’t have to be mentally exhaustive. It’s easier to take advantage of market inefficiencies caused by psychology in the market than any other factor.
You’ve nailed the value proposition of Commonstock 👏
@dissectmarkets And from one value proposition, there will spring many ☺️
Been a while since I logged in. Was a delight to be greeted with this as the first thing I saw. Awareness becomes a super power the more one cultivates. Cognitive biases are a great example.
All one needs to do is become aware of them to conquer them. Google cognitive biases. There are mannnny.
@aeric welcome back :)
@aeric so true— cognitive biases cause a lot of the self-inflicted problems humans have.
Brilliantly written Nathan! If I could only inspire my portfolio to such greatness! 😏
@parrot Thanks Parrot! Maybe someday we'll find the right words in the right order that inspire a portfolio to rise 😄
Spot on! I LOVE this cognitive bias codex graphic and often reference it whenever I question if I am falling victim to any of them when considering investment decisions. Crucial to always be in tune with yourself.
@jensen Gorgeous infographic— I love a good reference codex like this 😃
@nathanworden from Brent Donnelly this AM on Twitter. I’d rephrase it to make my own but I couldn’t have said it better myself -> “A simple reason technical analysis is inherently risky for humans: We are designed to see patterns. It’s how our biology works. It allows us to simplify and process a complex world. This tendency to perceive meaningful patterns within random data is called ‘apophenia’.”
@jensen My goal this week is to use the word 'apophenia' naturally in a sentence 😄
@nathanworden good luck! 😄
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