A Newbie Guide to Investing

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(11-09-2020, 08:05 AM)weijian Wrote: Methods change but principles don't. Have we adopted the principles and evolve ourselves to be closer to our true temperament?

I Hope This Inspires You

If you are still investing exactly the same way you did ten years ago you aren’t growing. Challenge your convictions. Surround yourself with people who share your values but think differently. I run into a lot of investors still talking about the wins they had 15 years ago. Don’t spend the next ten years bragging about the returns you had 20 years ago. Keep learning and evolving.

https://microcapclub.com/2020/09/i-hope-...pires-you/

If it still works, I don't see why you need to change. Otherwise, fully agree with the sentiment  Smile
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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(11-09-2020, 08:05 AM)weijian Wrote: Methods change but principles don't. Have we adopted the principles and evolve ourselves to be closer to our true temperament?

I Hope This Inspires You

If you are still investing exactly the same way you did ten years ago you aren’t growing. Challenge your convictions. Surround yourself with people who share your values but think differently. I run into a lot of investors still talking about the wins they had 15 years ago. Don’t spend the next ten years bragging about the returns you had 20 years ago. Keep learning and evolving.

https://microcapclub.com/2020/09/i-hope-...pires-you/

If it still works, I don't see why you need to change. Otherwise, fully agree with the sentiment  Smile
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
Reply
(11-09-2020, 08:53 PM)Wildreamz Wrote:
(11-09-2020, 08:05 AM)weijian Wrote: Methods change but principles don't. Have we adopted the principles and evolve ourselves to be closer to our true temperament?

I Hope This Inspires You

If you are still investing exactly the same way you did ten years ago you aren’t growing. Challenge your convictions. Surround yourself with people who share your values but think differently. I run into a lot of investors still talking about the wins they had 15 years ago. Don’t spend the next ten years bragging about the returns you had 20 years ago. Keep learning and evolving.

https://microcapclub.com/2020/09/i-hope-...pires-you/

If it still works, I don't see why you need to change. Otherwise, fully agree with the sentiment  Smile

Can't agree more - if returns are still good, why tinker for the sake of tinkering. If returns have been bad recently,be thoughtful about the edge in your process. If the edge is still there, just hang on - no approach works all the time, but the right approach works, on average, over the long run.

And the distinction between methods and principles can be vague. There were "value investors" in the dotcom that changed their method of valuation from liquidation value, then to earnings power, then earnings power + growth, then to franchise value, then finally to the price to eyeballs nonsense. That did not end well for them. They probably were arguing that their philosophy value investing did not change, but the methods to apply the principles had to change because the landscape had changed etc.

So I think it's important to be careful when considering changes to your approach. If one is led astray, what was initially conceived to be a change in methods could actually end up just being an excuse for following the herd.
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(11-09-2020, 08:53 PM)Wildreamz Wrote:
(11-09-2020, 08:05 AM)weijian Wrote: Methods change but principles don't. Have we adopted the principles and evolve ourselves to be closer to our true temperament?

I Hope This Inspires You

If you are still investing exactly the same way you did ten years ago you aren’t growing. Challenge your convictions. Surround yourself with people who share your values but think differently. I run into a lot of investors still talking about the wins they had 15 years ago. Don’t spend the next ten years bragging about the returns you had 20 years ago. Keep learning and evolving.

https://microcapclub.com/2020/09/i-hope-...pires-you/

If it still works, I don't see why you need to change. Otherwise, fully agree with the sentiment  Smile

Can't agree more - if returns are still good, why tinker for the sake of tinkering. If returns have been bad recently,be thoughtful about the edge in your process. If the edge is still there, just hang on - no approach works all the time, but the right approach works, on average, over the long run.

And the distinction between methods and principles can be vague. There were "value investors" in the dotcom that changed their method of valuation from liquidation value, then to earnings power, then earnings power + growth, then to franchise value, then finally to the price to eyeballs nonsense. That did not end well for them. They probably were arguing that their philosophy value investing did not change, but the methods to apply the principles had to change because the landscape had changed etc.

So I think it's important to be careful when considering changes to your approach. If one is led astray, what was initially conceived to be a change in methods could actually end up just being an excuse for following the herd.
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Rainbow 
Not sure change or not change is better.

For my investment journey, it's kind of keep learning, keep testing, refine/polish and then repeat the cycle again - focusing on pruning the weeds while tending a flower bed.

Methods/principles is like a chest of drawers with tools.

Each time, when a drawer is open, there are something new to learn.

Sometime, what I learn can be put into practice but most of the time, it's just not for me (too tough, too difficult, too time consuming).

Occasionally, there will be ah-ha moment that explains something that I couldn't figure out and naturally it becomes part of my experimentation.

In the end, I found out that there are not really one methods but multiple ways/tools to try out and gain from the investment world.  Different tools can be used/required to address a particular opportunities.  I have no doubt that if you only using one tools and focusing on polishing the same tools, the rewards could be tremendous.  In fact, I suspects that even the best market operator might had been using/testing multiple tools in their life, however, likely only one of the tool is most successful and most rewarding in terms of returns.  

Of course, given a chest of drawers, the question is really which one is the most rewarding and also emotionally satisfying too?

For me, value investing is definitely the one.
Unfortunately, I am still wondering why this make sense to my 10 baggers (Bestworld) but it does not make sense for my favorite stocks (Micro Mechanics)?

P.S. Bestworld was brought with good MOS.  Micro Mechanics was brought without MOS.


Stay home and stay safe, everyone.
Heart
Reply
Rainbow 
Not sure change or not change is better.

For my investment journey, it's kind of keep learning, keep testing, refine/polish and then repeat the cycle again - focusing on pruning the weeds while tending a flower bed.

Methods/principles is like a chest of drawers with tools.

Each time, when a drawer is open, there are something new to learn.

Sometime, what I learn can be put into practice but most of the time, it's just not for me (too tough, too difficult, too time consuming).

Occasionally, there will be ah-ha moment that explains something that I couldn't figure out and naturally it becomes part of my experimentation.

In the end, I found out that there are not really one methods but multiple ways/tools to try out and gain from the investment world.  Different tools can be used/required to address a particular opportunities.  I have no doubt that if you only using one tools and focusing on polishing the same tools, the rewards could be tremendous.  In fact, I suspects that even the best market operator might had been using/testing multiple tools in their life, however, likely only one of the tool is most successful and most rewarding in terms of returns.  

Of course, given a chest of drawers, the question is really which one is the most rewarding and also emotionally satisfying too?

For me, value investing is definitely the one.
Unfortunately, I am still wondering why this make sense to my 10 baggers (Bestworld) but it does not make sense for my favorite stocks (Micro Mechanics)?

P.S. Bestworld was brought with good MOS.  Micro Mechanics was brought without MOS.


Stay home and stay safe, everyone.
Heart
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