The Gut and Power Laws

Most of my angel returns have come from gut feeling and almost all of my stock market losses have come from same gut!

My gut has been ‘right enough’ for angel/seed investing.

Being ‘right enough’ in the stock market can lead to outsized returns, but using my gut to be right enough in the stock market did not work.

Until I started getting more mechanical with my stock market investing I struggled.

I think you have to have some system for investing in the stock market. I think that is why ‘stock picking’ is not for everyone. A system is a lot of work. The reason S&P index investing works for so many people is it is a system in itself. You still have to manage your emotions, but it does work over a long time horizon.

Angel/seed investing also has power laws at play. If you want to read more about ‘power law’ investing try these links –

If you want to read about power laws:

Angel Investing and Power Laws

Fred Wilson – Power Laws

Power Laws

Have a great day.

Also published on Medium.