Latest essay is out!

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Nathan Worden's avatar
I liked your characterization of Investing:
  • High stakes competitive endeavor
  • Brings out the best and worst in people
  • Ultimate freedom of choice: thousands of stocks, bonds, commodities, and currencies to buy and sell
  • Heavy binary outcome: riches or ruin


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Andy Buchanan's avatar
This is a great premise from the piece:

“Rules are only worth following when you are tempted to put them on hold. The investor needs rules that are hard to follow; easy rules aren’t actually rules. Mediocre ideas and principles yield mediocrity, which is easy to obtain. You must develop personalized principles that will stand true in hard and volatile times. You must develop dogma.”
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Andy Buchanan's avatar
Also really liked this discussion on dogma, and how it’s very useful in investing:

“Dogma is commonly used in a negative connotation to describe a person who blindly follows a set of rules, regardless of circumstance. This is exactly the way to operate a successful investment strategy. You don’t react to anything; you follow trusted rules regardless of how big or small the waves of the ocean curl and crash.“
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Andy Buchanan's avatar
The reason I like this characterization of dogma is because the Market is a machine that is designed to try and get you to break your own rules. To trick you into making a mistake and take your money.

Having dogma in this ‘environment of distraction’ is akin to being able to focus on the task at hand in the midst of a storm.
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Andy Buchanan's avatar
The essay states that “The definition of dogma is a settled or established opinion, belief or principle.”

This reminds me of @doughelton’s “Mom principal”
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Doug Helton's avatar
@nathanworden what is some dogma you have in your own investing?
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Nathan Worden's avatar
@doughelton when it comes to dogma, I liked how @crosswindcap cap characterized good dogma as:

“developing repeatable actions that have a high probability of being successful over time.”

For me, one of those actions is: read.

Read as much as possible about a company before you invest in it.

@invesquotes takes this to the nth degree, he reads a ton about companies he invests in. You can tell how much reading he has done by the deep dives he puts out.

Leandro, what was the goal amount of hours of research you try and do when looking at companies?
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Andy Buchanan's avatar
Another epic line from this essay:

“it is very hard to gain perspective without absence. Very few professions pay you to be detached and uninvolved. Both from success and defeat. Investing pays double”
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Doug Helton's avatar
@andybuchanan I don’t know if I’d call it “dogma” but yes, the way I force myself to stay focused with investing is I have to be able to explain what I am investing in, out loud, to three people. And one of those people has to be my mom.

(She likes it when I call)
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