Thread by @MashraniVivek

13 harsh truths about investing...

A thread...🧵

1. Markets are REGRET Machine

It starts off awesome...quick money, research, screenshots etc.

But then..

Stock can go up multifold after you sell it

It can start going down as soon as you buy it

If you don't buy and it goes up, you are unhappy

BE HAPPY IF YOU MAKE PROFITS

2. Risks will emerge very badly...you will have no idea WHEN and HOW...

Investing is RISKY....PERIOD...

Only thing that can save you is RISK MANAGEMENT, Asset Allocation and Your Behaviour...

https://twitter.com/MashraniVivek/status/1322831202412191745

3. Sometimes, you will fall in love with stocks...

Because

It was your first investment
or
You worked in that company
or
It was gifted to you

And even if it goes bad, we won't sell

BE DETACHED....that's advantage we have vs. promoter

Move On...Understand opportunity cost..

4. Adding more of companies which are not performing and causing big loss in our portfolio

We don't like losses...it creates loss aversion

And we tend to average down losers...please don't make this mistake...most people still do

This is another bitter truth about investing...

5. Follow-up to last point...

You will be scared to book losses and accept mistakes..

Taking profits is easy...taking loss in mistake is tough

Bite the bullet...take that loss and move on...don't ruin your portfolio..

6. Searching for reasons to buy your favorite stock or something which has come as stock tip

We tend to ignore anti-thesis....those risks built inside businesses while investing...

We just see positive side and jump in...looking for only positive validation...

BE BALANCED

7. FOMO is for real..fear of missing out when stocks are running fast...that momentum

Quick decisions can bring lot of pain

To avoid that...go slow...do proper research...take tracking position initially

Avoid FOMO...take fewer decisions
(Checkout video on my Youtube channel)

8. No matter how hard you try....you will never be able to perfectly understand any business 100%

You don't need to wait for perfection...

Even 80% big picture understanding is sufficient...

Remember: Investing is a game of probability not accurate forecasting

9. Best investments are made when thesis is simple..

Our brain keeps seeking complexity, jargons...

but best investments are those which can be explained to a 5 year old...

KEEP IT SIMPLE

10. Market will keep punishing those who don't learn from mistakes...

It's very important to keep learning and evolving...

Not just from your own mistakes but more importantly from other's mistakes..

My Video on mistakes:

11. Investing is a lonely game..

Yes, although it might look very glamourous during the bull market

Being Long term investor is a lonely game

You need to keep reading, researching, build conviction, convince yourself, be responsible for mistakes

Develop a good hobby alongside

12. SHIT HAPPENS

World is very dynamic...SHIT HAPPENS every time...

Be strong...have courage...have right mindset...

HAVE EMERGENCY FUNDS in Place

Have Health and Life insurance in place..

Diversify well...

13. As an investor, after doing research and sometimes after creating wealth....particularly during bull market, it feels we know it all...

But that's never the case...

Drop your EGO...be HUBLE...Keep Learning..

Respect Others..

Hope you found this thread useful...it would be great if you could retweet from the start of this thread and spread it with fellow investors...

You call follow me @MashraniVivek for more such content..

Check out my upcoming book trailer of #YouCanCompound here: