Thread by @MnkeDaniel

There are a lot of things that you can do to become a better investor.

But there is one thing so powerful that it alone can change your look on investments forever.

Every successful investor in history made use of this.

And forever and history are already a good start.

The one thing that you always need to know before you invest in anything is how long you’ll hold the asset.

Sounds simple but carries a lot of weight.

Your holding period defines your expectations and your actions.

A good investment is not necessarily bound to its holding period.

But it is bound to your expected holding period.

Example:
If you buy a company that you view as undervalued, you might expect the market to realize its mistake in six months.

What if that doesn’t happen?

Do you keep the stock, or do you admit you made a mistake and sell?

Your expected holding period decides whether you’ll recognize your mistakes or hold on and even double down on them.

Either way, it forces you to reevaluate your investment thesis.

Holding periods also make you realize „what you are“ in the first place.

Spending money in the hopes of making more isn’t investing.
It’s speculating.

Having a thesis, a plan, expectations, and facts are what makes it an investment.

If you realize that you buy and sell assets pretty quickly, you might want to redefine what you are. Investor or speculator.

There is no right or wrong per se.
(Although I prefer investing)

But knowing what you’re actually doing is crucial for success.

Last but not least, the „forever mindset.“

One question that changed my view on investments entirely is the following question?

Would you like to own this business forever?

This question alone removes all forms of short-sighted thinking.

Stock prices don’t matter anymore; short-term problems don’t matter anymore.

All you need to know is how the business is set up.

Is it chasing short term goals or does it prepare for the future?
Is its competitive advantage strong enough to remain for decades?

Those questions will come up.

And answering those makes you find the real gems out there.

If you find the time to read this, thanks a lot.
I hope it was worth it 😅

If it was, how about making others see it too.

Just Retweet the first tweet of this Thread.

For more content about investing and finance, follow me @MnkeDaniel

What do you guys think about this, and what is your investment horizon?

@honam
@DennisHong17
@10kdiver
@natstewart5
@TomGardnerFool
@heymaxkoh
@BRK_Student
@daniel_toloko
@Ajitshah73
@GSpier