HOW TO WIN IN INVESTING?

So how do you win in this game of investing and why should you care?

What do we mean by winning? Firstly who are we competing against? Is it the person who sells you the share that you are buying? Because if you are buying that means you believe the future prospects of this company is bright while the seller thinks otherwise. Are you competing with the lady luck and you are betting against adverse developments from happening? Or is it just a matter of self control, restraining yourself from making foolish mistakes.

Maybe investing is not about winning? Then what is it about?

Well, you have to make be making more money that’s for sure. If you made $10 and everyone else made $100, then do you see yourself as having made money or have you lost out due to opportunity costs? If that’s the case then how can you make sure you are the one making $100 instead of the former?

One thing for sure, nothing is for sure. But increasing your probability is possible, since chance favors the industrious, does it not?

Like an artisan we have to keep working on our craft and get better, chalking up that 10,000 hour to reach master level. But how does one really becomes excellent at something? Practice makes perfect? What if you are practicing the wrong thing and perfecting your mistake?

So the real question to ask is; How does one become better at investing?

1. We must make the first step and purchase our first stock like an artist who wants to succeed must first paint.
2. So you have already bought your first stock? Then what next? It depends on whether did you make an intelligent buy in the first place? If not, you need to start all over from scratch(liquidate).
3. What makes a decision intelligent or foolish? We have to see the reason backing the decision. So we say a decision is intelligent when backed by sound quantitative and qualitative reasoning. The art of becoming better at investing boils down to becoming better at thinking
4. How do I become better at thinking? Does thinking multiple times more throughout the day equals better results? How about finding someone to do the thinking for you? That will not improve your thinking either. When you write down your thoughts you are forced to commit in writing your reasoning. This is the first step and also the most difficult because after a certain time period you can actually look back and see whether you were right and if not, that is scary. Now you finally have something practical to work on your thinking, your old thoughts.

That sounds like lots of work, why should you care to better yourself?

More important than the will to win is the will to prepare

If you were a soccer superstar your career would be great until the age of 30 and above where your body starts to deteriorate and you just can’t keep up with the evergreen new stars.

If you were a golf superstar your career began when you a teenager, you could continue playing way pass the age of 30 because you only get better the longer you play in fact you could keep on playing until you retire.

That’s what we want, to be playing in a game that lets us play equally well when we are old. Not only do we have time on our side now, as time pass we get more experience, knowledge and hopefully a little wiser. When you have such a time perspective it also gives you an edge over the traders because as an investor it is time that is making your money work.

In conclusion, to win in investing write your reasoning down, let time does it work then critic yourself.