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Fritz

@Fritz844

23 May

Questioning popular narratives (from my old notes).

(1/x)

We think in terms of stories. Stimuli direct our attention to real-world objects, which our inner writer explains via plausible stories.

Our brains contain sets of stories that we mostly borrowed from others. If the narratives seem reasonable, fit with our own observations and we hear them over and over again, then chances are high that we will eventually buy into them.

Read 18 tweets

Fritz

@Fritz844

16 May

Today, much of the focus is on US compounded stocks, cryptocurrencies and COVID-19.

Let's get some perspective (1/x)

Key headlines in 1999:
• Motorola earnings
• Gateway Spanish speaking product
• Mutual funds
• Intel earnings

Key headlines in 2000:
• Compaq introduces hand-held line
• Looking forward to Home Depot earnings
• Bank CEO regulation
• Venture Capital flows still strong, despite crash

Read 25 tweets

Fritz

@Fritz844

23 Apr

Swiss banker wisdom, as retold by Max Gunther (1/x)

1. If you are not worried, you are not risking enough

Humans need adventure, we get satisfaction out of it. Hard to get rich if you try to avoid worry. You're not going to get rich from salary. Play for meaningful stakes. Get over the fear of being hurt. 3-6 stocks are enough.

2: Take profits too soon

Don't be too greedy. Decide what gain you're hoping for and when you reach that point, get out. Long winning streak make the news and get talked about, but they are newsworthy for the very reason that they are rare.

Read 13 tweets

Fritz

@Fritz844

21 Apr

How I imagine Alfred Adler would have described investor psychology (1/x)

1. Investors' goal is to show their superiority
- Any drawdown is felt as a threat to their ego, and so they reinforce their belief in their own superiority by doubling down
- Gains are sold in an effort to maintain their self-image of investors who cleverly buy low and sell high

2. Blaming external events is a way to protect a fragile ego.

If a stock disappoints, you are more likely to blame corporate governance, investor sentiment, the Fed, short-sellers or someone else. Taking full accountability is hard because you'll challenge your identity.

Read 7 tweets

Fritz

@Fritz844

18 Apr

@naval

I really enjoyed the new book on @naval. Here are my favourite quotes from it (1/x):

"You're not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom."

Mostly true, in my experience. Either way, you need to build up assets that belong to you alone, and not your employer.

"You will get rich by giving society what it wants but does not yet know how to get. At scale."

Emphasis on 'at scale'.

Read 15 tweets

Fritz

@Fritz844

18 Apr

Typical reader question:

“I have money in the bank that I don’t know what to do with. I have never invested in stocks before. Where do I begin?”

I'm not a financial advisor but I can relate. You want to compound your capital but also be prudent and not gamble. Here is my advice

Some general advice:
• Diversify broadly. If you don't know what you're doing, just buy everything.
• Avoid leverage. Ruin kills compounding.
• Make contrarian bets. Buy before others do.
• Focus on long-term value. The long-term is easier to predict than the short-term.

1. First invest in freehold property with leverage

Most people who buy property do well because:
• True underlying inflation is probably 3%+
• You can use 5x leverage if not more

That causes the return on your initial housing deposit to reach double-digits. Hard to beat.

Read 8 tweets

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