Poor Investors often disguise inexperience with arrogance. Rich investors disguise experience with humility. The richest person in the room is usually the quietest one in the room. The poorest person in the room is usually the loudest one in the room.

We are all fighting the same battles: Riding a winner deciding if you should hold it. Holding a loser deciding if you should sell it. Sticking with a stock that has gone nowhere for quarters/years questioning your thesis. You aren’t alone. We are all fighting the same battles.

One of my favorite

Forbes estimates that Beanie Baby creator Ty Warner’ net worth is $2.7 Billion. This is an amazing achievement considering a bulk of it was earned during a 3-year time frame selling a $5 per unit stuffed animal.

The fact that Ty Warner’s Beanie Babies were able, without the benefit of a single ad, to outpace the combined annual profits of the largest toymakers in the world for even a few years is unprecedented.

To illustrate how quickly the bubble grew - In 1995, Ty Warner’s company Ty Inc had sales of roughly $28 million. In 1996 sales were $280 million with $90 million in pre-tax income. By 1998, Ty Inc sales reached $1.34 billion with pre-tax income of $700 million.

In Ebay’s 1998 Annual Report it disclosed Beanie Babies as material. “At times, approximately 7% of our listings involved Beanie Babies”. Furthermore, it was said that 10% of Ebay sales at the time were derived from Beanie Babies.

Successful investing is hard work because it means disciplining your mind to do the opposite of human nature. Buying during a panic, selling during euphoria, and holding on when you are bored and crave action.

I became financially independent in 2008 at age 27. Or as my Father likes to say, I retired. Yeah right. It’s more like you exchange security for total insecurity.

I get asked a lot about how much capital you need to become a full-time investor. That answer will be different for everyone. It’s a personal decision. I was single with no kids living in Lancaster, PA. It was a great time to make that decision.

I would say a much better question is how much pain can you endure.

Can you sustain a 30-40-50% drawdown while also drawing it down to pay bills?

How would this affect you emotionally, psychologically?

Would two or three bad years in a row cripple you?

At what point would your investment strategy start to crumble by these emotions?

At what point does my advantage of “focus on the long-term” shift to “this next quarter needs to be good” or else..

Am I mentally prepared to perhaps go to my wife and tell her I failed and can’t support us anymore? That I need to get a job, that she needs to get a job.

Out of 17 stocks that I own, I am allowed to go wrong in 2-3 of them. Not going wrong shows that you are not taking enough risks or operating on the edge. Learning from mistakes is the number 1 way to improve as an investor. An excerpt from the annual letter :)

Now u ll see real estate stocks threads and youtube vidoes, All sugar stocks ethanol and ancilliaries "Time for a thread" disappeared once stocks stop moving up. Understand and react. Threads come out when entries are made by bigger folks and retail enters at peaks giving exits.

Unseen rule 1 :: whatever be the reason, never justify the valuations of a rising stock price

Unseen rule 2 :: whatever be the reason, never defend the quality/reason of a falling stock price

Unseen rule 3 :: never react in an impulsive manner to a rising/falling stock price

I have seen plenty of Buffettology on Twitter and in other places over the past few years. Its time to clear the air and understand that there wasn't one but 3 different Warren Buffett's that existed throughout his career 📚📚

Time for a thread: 3 Different Buffett's 🧵🧵🧵

One of the biggest mistakes that you as an investor can make is to forget the basic and the most important mental model an investor can have: Numeracy. Being fluent with numbers and respecting the context in which Buffett made his returns.

At the beginning of his career, let's call this Warren Buffett 1 i.e. Between 1957-1968. This was the time when he was working with small sums of money. He was extremely valuation conscious and guess what. How many stocks did he buy and sell between this period?

In this period, he bought and sold nearly 400 stocks. He bought Geico and sold it within 18months, he bought Marshals wealth at a PE of 3 times and he bought Commonwealth at a PE of 5times and sold it at a 60% gain. His returns were mind-boggling too during this time period

No Wonder he said, “The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers… I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.” Look at the performance once

The worst thing that you can learn as an investor early in your journey is to take a reckless risk without much research, and make money

It would take you a lot of time and effort to unlearn that easy money exists in the markets