What this blog is about
...and what its not.
In the past couple of months I have spent quite a lot of time in several investing communities, these ranged from discord servers, subreddits, Twitter, Seeking alpha, Yahoo finance, and others.
Many of these communities were started by, or led by some fairly successful investors who really know what they are doing and have, over a long period of time, managed to attain considerable wealth from their investing.
These are good people, good investors and great role models to follow that are taking time out of their days to share with us their journey and what they learned about investing.
Some of them write articles, some of them have podcasts, some of them make educational youtube videos.
Unfortunately, you can have all the best examples and mentors in the world, and most people will still choose to ignore the lessons they teach, and instead will simply blind themselves for no good reason.
Most of the communities around these content creators are filled with some very nice people who on the surface appear to have a good grasp of investing, but much like an old car with a new paint job once you open the engine bay you quickly realize it’s full of crap.
If you don’t believe me, see for yourself. Go to one of these communities, find someone who is talking about a company.
I’m not talking about some speculative play, just find someone talking about good blue chip companies like $PEP or $KO and ask some questions.
Ask them why they like the company. Ask them if they are invested in it. Ask them what they think its worth, and how they arrived at that number.
Don’t just ask superficial questions, and don’t take superficial answers. Ask for the numbers, and challenge them on it.
What you’ll find is that almost none of these people have actually put any thought into choosing these companies. Most of them have never read the companies 10-K, they haven’t looked at their income statement or their balance sheet, and even if they had they wouldn’t know what it meant.
Sure they’ll talk about how great the company is, and how profitable it is, and spew out some thought terminating cliche.
Maybe they’ll say “Pepsi is a good stock to own because it’s diversified”, or perhaps “They have good management” or even “They’re involved in China and I want to have some investments in that market”, and think it means something, but they haven’t actually put any thought to it.
They are just parrots, repeating what they heard.
They have no idea what it means except that it sounds good, smart and like something a financial analyst would say.
They haven’t actually done their research. They haven’t checked if the diversification is actually a good thing for Pepsi, or if its dragging their profit margins down.
They say the management is good, but have no idea what actually makes a management team effective other than their effect on the stock price!
These people haven’t got a clue what they are doing, and they are putting thousands of their hard earned cash into companies that might be the complete opposite of what they think it is!
If I sound harsh about this, it’s because I don’t want you to make the same mistakes I made.
Those examples I described above aren’t taken out of thin air, some of them I heard from people, and some of them were, unfortunately, the rationalizations I told myself to justify investing in businesses I shouldn’t have invested in.
That bit about China? That was my rationalization to invest in HSBC in January 2020, at a price that was not justified by its fundamentals.
I’ve lost 600€ in that, and it could have been worse if I had gotten spooked by my own stupidity and sold back in April 2020.
These people do not have bad intentions, they are just lying to themselves and buying things because it feels good. Because it feels like the right thing to do.
Because on a superficial level their thesis about a company makes sense, at least to someone who hasn’t looked under the carpet.
So what now?
To me, the path is simple, and is summed up in two bullet points:
I cannot keep investing blindly.
I must learn to invest responsibly.
It’s really that simple.
Over the past year i have invested, sometimes blindly, sometimes having done some research, sometimes having put a lot of thought into it.
I’ve made money, and I’ve lost money.
Some people would be discouraged by their failures, and quit here. Sometimes that’s for the best, a lot of people don’t have the nerve to handle the fluctuations in the market, they jump in when its hot, and jump out when it gets cold, to predictable results.
I’m not one of those people.
While i’ve not always followed the plan, I have never sold a company in a panic just because its stock went down 2$, though perhaps i should have in certain cases!
I’m confident in being able to make emotionless decisions, and to stick with them to the end. And so that is what I will do, with this blog as a record of my thought process, of my decisions, of my successes and failures.
Maybe I will make money. Maybe I will lose money. But what I can promise you is that if you follow me along this journey you will see why I do what I do. Why I invest in a given company, and for what reasons.
And what I want you to promise me is to look at what I write, and call me out on the bullshit. If I write things that make no sense, if I fall into the trap of justifying bad decisions and bad investments for not good reason, I want you to call me out.
Don’t let it slide, don’t let me talk bullshit. Give it to me straight.
I hope you will join me on this ride, and if not, you’re welcome to jump in at any time!