IFB27: 6 Unconventional Investing Principles for Beginners

 

Welcome to episode 27 of the Investing for Beginners podcast. In today’s show, we will be discussing six unconventional investing principles. These are ideas that Andrew has come up with that help you with some of the more difficult emotions related to investing.
These ideas are sometimes hard to implement, but when you are aware of them, it does make it easier to make a conscious effort to be more diligent about correcting our thinking.

* Let go of the results
* Don’t sign up for deals stacked against you
* Always build your power
* Don’t rely on one stock
* Don’t take pessimism too seriously
* Lose the ego

Andrew: Again I am going to talk about some principles today, and there is some good mindset stuff in here, and it’s not anything I’ve seen talked about in books or online. It’s just some stuff that came to me, trying to look from a mastery perspective and how some things and some experiences I’ve seen.
How can we kind of draw that in together and organize into useful tips?
For number one:
Let go of the results.
I think this is a mindset trap, where you see a lot of beginners particularly get into this. Everybody is, so results-focused and wanted to buy a stock and have it double it in a year. They want to get in on the next AMD, Amazon; they want just to have money and make that money grow very quickly and be able to realize those profits very quickly.
It makes people feel like they’re experts. Obviously, you become richer. It becomes such a focus where you’re deceiving yourself into thinking you’re becoming a better investor because you’re getting these short term results.
over the long term then could be unsustainable results, they could be negatively affecting you in the long term. Especially if you are getting into stocks that are very expensive and you may be at the tail end of a bubble curve for example.
So you could be getting some short term nice gains, only to see it crash right at the tip of a bear market, or market crash.
I think having this mindset where you let go of the results, focus on the things you can control. I like to do this too, and I talk about it in the eLetter all the time.
I’ll have months that are spectacular and see these performance numbers that makes my ego feel great, makes me feel like the portfolio is moving in a direction I want to see it go.
You have to take it with a grain of salt and understand if you are going to have a level head, you need to have a level head, especially in bear markets and turbulence. We’ve talked about all this before, and you can hear about time and time again, if you are going to have any success in the market, it’s going to come because of your holding for the long-term. You are riding out the ebbs and flows, ups and downs of the market.
You’re letting when the bear market comes you’re going to ride the recovery when the bull cruises along you are going to ride it up as well.
When you have a mindset where you don’t care too much about the results, you can be free to have this level head, to be stoic in both victory and defeat. If you have periods where you are underperforming, we have talked about Warren Buffett having periods where he was underperforming, Seth Klarmann has had them. I have had periods as well.
Understanding that those can be some short-term setbacks and you decide with your mindset how you want to perceive that and if you want to accept that and let it affect you emotionally or not.
It works on the flip side when you are doing great and just crushing it, and your stocks are really on the hot streak, all these stocks keep going up. The trick is to stay humble, stay stoic and understand just because there is a bunch of green in the portfolio today doesn’t’ mean that it is going ...