Probably due to the way we’re taught in schools, most people approach markets with a formulaic/strategic approach. We assume that there must be a strategy to make money and once we figure out the strategy we cant help but make money at will. (1/n)
So we read books, listen to podcasts, attend AGMs and figure out a strategy that we can identify with. (2/n)
Once we find a rational strategy - value, momentum, growth etc.- we assume the markets, like science, will give us the desired output in OUR timeframe. Since we believe in this formulaic approach we also try to take short-cuts - excessive leverage - with these formulas. (3/n)
The need to generate high returns EVERY year, only makes this tendency worse. The truth about markets is that we cannot “expect” or plan a return & then works backwards. That's just not happening. If the strategy is rational, the returns happen, but in their own time. (4/n)
So our primary focus should not be to debate whether to pick this rational strategy or that - but on our ability to survive and stay patient - across various market events - for the market to come around to give us what it wants, at its own time. (n/n)
