You can borrow stock ideas from other investors, but you can’t borrow conviction
You must understand the bull AND bear case upfront, otherwise you won’t have the conviction to hold when the price is going down
Panic selling once can destroy years of good investment decisions in an instant
but keeping your head on straight when your portfolio is tanking is hard
Here are 13 investing tips/tricks/principles that I use to keep calm when my portfolio is in free fall:
You can borrow stock ideas from other investors, but you can’t borrow conviction
You must understand the bull AND bear case upfront, otherwise you won’t have the conviction to hold when the price is going down
Conviction enables patience
Patience builds wealth
If a 20% drop shakes your confidence in a business, you didn’t do enough research
In the short-term, emotions & computer algorithms determine stock prices
In the long-term, profit growth determine stock prices
This is a core investing principle that you must fully embrace
Net income growth & stock price growth are closely linked in the long-term
That’s not a coincidence — profit growth IS WHAT DRIVES long-term value creation
It’s tempting to want to go “all-in” when you find an exciting new stock idea
But, what if you are wrong about the business or management?
Or, what if you are right about the business but wrong about the valuation?
My personal process is to buy in 0.5% increments and add over months/years as my conviction builds
If I’m right, a little is all I need to do great
If I’m wrong, I won’t be hurt much
Every great stock — WITHOUT EXCEPTION! — will get killed at some point
This isn’t a bug — it’s how investing works
You must embrace the fact that volatility is NORMAL
It has declined:
10% - 30 times
20% - 14 times
30% - 8 times
40% - 5 times
50% - 4 times
90% - 1 time
Returns since IPO: 164,400%
Trading is tempting when it’s on your phone & easy to do
My broker is Interactive Brokers
It’s a PAIN to log in
It's a PAIN to place a trade
I love the friction -- I have to really want it to trade
Cash is a drag on returns during bull markets
Cash is the raw material of superior returns in bear markets
Handling the emotional swings of common stock ownership is hard
Those swings get much, much wilder when you use margin and/or options
Compounding interest is all the leverage you need!
Never invest alone!
A good community is worth its weight in gold
Ask: Does your social media feed make you calmer or stressed out?
If it is stressed out, upgrade your feed!
@awealthofcs
@dmuthuk
@iancassel
@michaelbatnick
@orangebook_
@TMFStoffel
These podcasts can help:
https://t.co/PBRmYEopNd
I have an MBA in finance
— Brian Feroldi (@BrianFeroldi) April 8, 2021
But I\u2019ve learned 10x more about investing from listening to podcasts than I did in school
Here are 24 podcasts that I regularly listen to that will make you a better investor\u2b07\ufe0f
Markets are volatile during economic downturns
Economic downturns are also when your job is most at risk
That’s A LOT to deal with if you have debt & 1 source of income
Eliminate debt, build cash, & create new sources of income
I keep a simple investing journal
Before I buy/sell, I have to write down WHY
It slows me down, but forces me to think things through
The weekday is full of distractions
Eliminate that factor by making all your important financial decisions on the weekend
Voluntarily watching the news is like inviting Debbie Downer into your home and asking her to talk non-stop
If the news is really that important, it will find you!
Whenever I feel bad about my near-term returns, I zoom out and look at my long-term returns
It always makes me feel better
But the price of that returns is:
1⃣Perpetual Short-term Volatility
2⃣Perpetual Uncertainty
PAY IT!
I regularly tweet about money, investing, and self-improvement
If those topics interest you, follow me @brianferoldi
You may enjoy all the other threads that I’ve written
https://t.co/9zUKu1NhAl
MEGA THREAD\U0001f9f5
— Brian Feroldi (@BrianFeroldi) April 25, 2021
My Mission: To Spread Financial Wellness
All of my best threads on money, investing, and self-improvement can be found below
*This list will be continually updated \u2b07\ufe0f
I teach beginners how to researching investments on my YouTube Channel
https://t.co/VRHp4ZtRcz
More from Brian Feroldi
Last week, I asked my followers to share their favorite Twitter threads
I receive tons of wonderful replies and read through them all
Here are 31 amazing threads that are well worth your time ⬇️
1/ @10kdiver on
2/ @aaronbush100 on 20 semi-controversial investing
3/ @annieduke on category
4/ @awilkinson on losing
I receive tons of wonderful replies and read through them all
Here are 31 amazing threads that are well worth your time ⬇️
1/ @10kdiver on
1/
— 10-K Diver (@10kdiver) April 10, 2021
Get a cup of coffee.
In this thread, I'll walk you through the basics of leverage -- in our personal lives and in the companies we invest in. pic.twitter.com/9MilmwE9f7
2/ @aaronbush100 on 20 semi-controversial investing
20 semi-controversial investing beliefs [THREAD]:
— Aaron Bush (@aaronbush100) May 24, 2020
3/ @annieduke on category
The most dangerous category of poor decisions are ones that remain easily hidden from view because any instance of that type of decision is so easy to rationalize.
— Annie Duke (@AnnieDuke) October 7, 2020
1/12
4/ @awilkinson on losing
This is a story about how I lost $10,000,000 by doing something stupid.
— Andrew Wilkinson (@awilkinson) March 30, 2021
Ten. Million. Dollars.
Literally up in smoke. Money bonfire.
That\u2019s enough to retire with $250,000+ in annual income.
Here\u2019s what happened\u2026
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To people who are under the impression that you can get rich quickly by working on an app, here are the stats for https://t.co/az8F12pf02
📈 ~12000 vistis
☑️ 109 transactions
💰 353€ profit (285 after tax)
I have spent 1.5 months on this app. You can make more $ in 2 days.
🤷♂️
I'm still happy that I launched a paid app bcs it involved extra work:
- backend for processing payments (+ permissions, webhooks, etc)
- integration with payment processor
- UI for license activation in Electron
- machine activation limit
- autoupdates
- mailgun emails
etc.
These things seemed super scary at first. I always thought it was way too much work and something would break. But I'm glad I persisted. So far the only problem I have is that mailgun is not delivering the license keys to certain domains like https://t.co/6Bqn0FUYXo etc. 👌
omg I just realized that me . com is an Apple domain, of course something wouldn't work with these dicks
📈 ~12000 vistis
☑️ 109 transactions
💰 353€ profit (285 after tax)
I have spent 1.5 months on this app. You can make more $ in 2 days.
🤷♂️
I'm still happy that I launched a paid app bcs it involved extra work:
- backend for processing payments (+ permissions, webhooks, etc)
- integration with payment processor
- UI for license activation in Electron
- machine activation limit
- autoupdates
- mailgun emails
etc.
These things seemed super scary at first. I always thought it was way too much work and something would break. But I'm glad I persisted. So far the only problem I have is that mailgun is not delivering the license keys to certain domains like https://t.co/6Bqn0FUYXo etc. 👌
omg I just realized that me . com is an Apple domain, of course something wouldn't work with these dicks
1/12
RT-PCR corona (test) scam
Symptomatic people are tested for one and only one respiratory virus. This means that other acute respiratory infections are reclassified as
2/12
It is tested exquisitely with a hypersensitive non-specific RT-PCR test / Ct >35 (>30 is nonsense, >35 is madness), without considering Ct and clinical context. This means that more acute respiratory infections are reclassified as
3/12
The Drosten RT-PCR test is fabricated in a way that each country and laboratory perform it differently at too high Ct and that the high rate of false positives increases massively due to cross-reaction with other (corona) viruses in the "flu
4/12
Even asymptomatic, previously called healthy, people are tested (en masse) in this way, although there is no epidemiologically relevant asymptomatic transmission. This means that even healthy people are declared as COVID
5/12
Deaths within 28 days after a positive RT-PCR test from whatever cause are designated as deaths WITH COVID. This means that other causes of death are reclassified as
RT-PCR corona (test) scam
Symptomatic people are tested for one and only one respiratory virus. This means that other acute respiratory infections are reclassified as
4/10
— Dr. Thomas Binder, MD (@Thomas_Binder) October 22, 2020
...indication, first of all that testing for a (single) respiratory virus is done outside of surveillance systems or need for specific therapy, but even so the lack of consideration of Ct, symptoms and clinical findings when interpreting its result. https://t.co/gHH6kwRdZG
2/12
It is tested exquisitely with a hypersensitive non-specific RT-PCR test / Ct >35 (>30 is nonsense, >35 is madness), without considering Ct and clinical context. This means that more acute respiratory infections are reclassified as
6/10
— Dr. Thomas Binder, MD (@Thomas_Binder) October 22, 2020
The neither validated nor standardised hypersensitive RT-PCR test / Ct 35-45 for SARS-CoV-2 is abused to mislabel (also) other diseases, especially influenza, as COVID-19.https://t.co/AkFIfTCTkS
3/12
The Drosten RT-PCR test is fabricated in a way that each country and laboratory perform it differently at too high Ct and that the high rate of false positives increases massively due to cross-reaction with other (corona) viruses in the "flu
External peer review of the RTPCR test to detect SARS-CoV-2 reveals 10 major scientific flaws at the molecular and methodological level: consequences for false positive results.https://t.co/mbNY8bdw1p pic.twitter.com/OQBD4grMth
— Dr. Thomas Binder, MD (@Thomas_Binder) November 29, 2020
4/12
Even asymptomatic, previously called healthy, people are tested (en masse) in this way, although there is no epidemiologically relevant asymptomatic transmission. This means that even healthy people are declared as COVID
Thread web\u2b06\ufe0f\u2b07\ufe0f
— Dr. Thomas Binder, MD (@Thomas_Binder) December 16, 2020
The fabrication of the "asymptomatic (super) spreader" is the coronation of the total nons(ci)ense in the belief system of #CoronasWitnesses.
Asymptomatic transmission 0.7%; 95% CI 0%-4.9% - could well be 0%!https://t.co/VeZTzxXfvT
5/12
Deaths within 28 days after a positive RT-PCR test from whatever cause are designated as deaths WITH COVID. This means that other causes of death are reclassified as
8/8
— Dr. Thomas Binder, MD (@Thomas_Binder) March 24, 2020
By the way, who the f*** created this obviously (almost) worldwide definition of #CoronaDeath?
This is not only medical malpractice, this is utterly insane!https://t.co/FFsTx4L2mw