Thread by @Biotech2k1

#Accountability

Learn from yourself.

1/ When I do all my research into my companies, I make up these big reports about the company. They
include my impressions on the management, the science, the manufacturing, the different drugs, the
total potential and even the valuation.

2/ I publish these reports, and most people think I do that for them. I actually do this to hold myself accountable to my decision making.

3/ Great sports players will spend countless hours watching film of the big game. They do this to learn from what they did right and what they did wrong. In the same way, a great investor learns from their past by reviewing their investments.

4/ You should keep a log of your investment thesis for each company, what went right and what went
wrong and what was the final outcome. Did you expect this company to be a big winner, but the
management blundered it up over and over again?

4/ Making a log and recording what went into an
investment and how it progressed and its final outcome, can make us a better investor.

5/ I go over my investments every few months and every year. I see what I did right and what I did wrong.
I review my trades, why I made them, what I was thinking and what I might have done right or wrong.

6/ Sometimes I will find I sold a company on a bad event just for it to make a great comeback, or I sold
that company because of a concern and it ended badly. I dodged a bullet on that one.

7/ This is how we can figure out what mistakes we make repeatedly or what we are doing right. When I
first started recording all my investing decisions, I quickly figured out a few things I was doing wrong.
I will list them since I bet they are common mistakes.

8/ First, I traded too much off emotion. When a stock was going higher, I wanted to keep buying. When it
was going lower, I got distressed and wanted out at any cost. I established my trading rules to enforce
the discipline around this mistake.

9/ I set a rule that I will never pay above my last purchase price. I always insist on getting a lower cost than my last buy, or I just don't buy. That stopped me from chasing euphoria and buying a top which cost me in big losses.

10/ I also set up the Starship Trooper rule that I
never sell a company unless it's for fundamental reasons.

11/ The second big mistake I made was I was too quick to take profits on the way up. I was leaving way too much money on the table. That is when I set a limit of 20% minimum to take a profit. I only fade 1 lot each 20%. I never sell them all and I never go below my free shares.

12/ The last mistake I made was the worst. I was holding my losers way too long. It's only natural to insist we got it right and dig our heels in. My new rule is, If it goes down due to general sector weakness, it's a buying opportunity.

13/ If it goes down because it had a failure or something went wrong, I don't reward bad behavior. That keeps me from buying those dips because a company failed. That is just wrong, and I see so many investors treat failure as an opportunity.

14/ I also set my rule of when in doubt sell it
out. I can always come back later.

15/ There is a saying that goes, “Experience is a cruel teacher, but Oh My God, do you ever learn”. If we
learn from our mistakes we don't have to repeat them.