I love this quote from Hugh Hendry – Hendry once said to an interviewer: “To my mind, the three most important principles when it comes to investing are Albert Camus’ principles of ethics: God is dead, life is absurd and there are no rules.” He suggested that a great fund manager was defined by “an ability to establish a contentious premise outside the existing belief system, and have it go on and be adopted by the rest of the financial community”.
My investing life has had many drawdowns, but after years of learning, full of profit and joy. I believe we can accelerate this journey. I want to start packaging this idea better.
I am constantly asked how to make money in stocks and investing. I have started to write this post 100 times. It’s almost impossible to teach people ‘HOW TO’ invest, but people can learn for sure.
The easiest start point would be to cut the list down to the bone and post it. Here goes:
1. Do not let trades become investments, but it is ok to let investments become trades.
2. Personality first. Know yourself! (The markets will exploit your weaknesses)
3. Develop your own approach.
4. Be flexible because you will be very wrong.
5. Find mentors. Today! Don’t expect anything from them.
6. START today. While learning how to invest, decide on an amount that you can invest in the markets and dollar cost average. Invest an equal amount of money once a month or quarter for a long period of time.
7. Keep your costs down.
8. Focus on your strengths, invest some profits in your weaknesses.
9. Do not ‘practice’ investing and do not call your investing money ‘Vegas’ money. Develop a routine.
10. Write it down! Start a journal.
11. Immerse yourself in the language of the markets and investing. It has never been easier.
12. Knowing when and how to sell remains the most mystical of processes. I just say do it consistently. There is no shame in leaving money on the table.
PS – Listen to this great interview of Jack Shwagar and read his books if you want to invest your’s or other people’s money.
PSS – There is no ‘one’ book, though I enjoyed ‘Reminiscenses of a Stock Operator‘. You can’t go wrong reading it.
Hope this helps a little bit. Chime in with other thoughts of course and I will continue to refine.