Thread by @prabhakarkudva

A small and incomplete guidebook for new investors to navigate fintwit (including my own tweets).

A disclaimer which i am sure all of us "experts" want out there.

A Thread.

Understand that there are no experts, just a bunch of people whose strategies are working in the current environment. When the strategies stop working we will go quiet & a new set will emerge. Assume all strategies work reasonably well over time with bouts of bad underperformance

Don't fire your advisor cos they are not doing well for two years & someone else is harping about their recent success on fintwit. We abandon our strategy & flock to the recent successes at the worst possible time. Give 4-5 years to a strategy. Diversify across them if you like.

When single stock charts emerge - ask yourself what is the %age allocation to the stock in the overall net-worth. Likely it will be a small allocation in a portfolio of tens of stocks and everyday we will have a new stock chart to publish.

If such stocks appear in a focussed portfolio, know that they can be sold without notice even at a loss and you wouldn't know till it's too late and you may not even have the mindset to book a loss and move on. We can exit & make it up some other stock but you will remain stuck

MTM/Perf Screenshots - unless we are posting them religiously on a daily basis - ignore us. By all means learn from us but don't think we are demigods. We are not. Investing/Trading is hard work & it needs immense focus & discipline across years. Don't believe it's easy. It's not

F&O - I am sure most do, but if you don't, understand the leverage aspect more than anything else and position size your trades. Don't mix investing mindset with trading. Stop-losses are critical due to leverage. Buy and hope works in investing many times but never in F&O.

If you DON'T demonstrate the discipline of sticking to your stops - don't venture into F&O. Strategies are dime and dozen but you need to prove to YOURSELF that you can implement risk management FIRST before you do anything in size.

Option Selling - Digest the asymmetric nature of short options. We think we know it theoretically but you should know it in your bones, know the worst case exposure & mtm of any option sell before you put it on. Digest the worst case & bet accordingly. No one will tell you this.

Option Buy you need to get the direction, vol, timing - all right at the same time - consistently. There are experts here but understand they have dedicated years. Learn from them but don't expect to replicate them from a workshop unless you can put in the years & tuition fee.

Index Funds - They are not the pathway to low risk & high returns. Study the periods when index funds went nowhere for 2-3-4 years as select stocks massively outperformed. You need to sit through them to get the benefits. They are the most cost effective way to get avg returns.

Anonymous accounts - they are anon so that they can speak their mind with no implications - which is very good most of the times. But at times the anonymity is misused and they write with the benefit of hindsight. In such cases learn to ignore them.

What ever i have written above - take it with loads of salt and pepper.

Twitter is a great platform to learn and broaden our horizons but not to take or implement specific financial advice.

Seek professional financial advice from people you have come to trust.