HOW TO REDUCE INVESTMENT MISTAKES?

If I had to sum up this article in a single point, I'd tell you that the only mistake ALL investors make comes from themselves!

Whatever the investment in question (stock market, real estate, crypto, ...), the only variable you can and must master is YOURSELF. The stock markets won't be held responsible for your lack of rigor or selection.

So, let's take a look at how to overcome these investment mistakes:

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1. Don't feel sorry for yourself, it doesn't solve anything

On the whole, jealousy, resentment, revenge, and self-pity are dangerous thoughts. Self-pity is very close to paranoia, which is one of the most difficult types of thought to change. We shouldn't allow self-pity to arise... Self-pity won't make things better.

2. Keep learning and you'll keep progressing in real life

The people who go forward aren't the smartest. They go to bed smarter every night than they wake up that day. This is particularly useful when you've set yourself long-term goals.

3. There will be unfair and terrible blows in life, use them positively

4. It is wise to hold what you know and admit what you don't know

Aristotle and Socrates also said something similar: true understanding is understanding how ignorant you are.

Aristotle and Socrates discusing around the table

Is it a skill that can be taught or learned? If you know enough about the risks involved in the outcome, maybe you do. Some people are particularly good at understanding the limits of their knowledge because they have to. Imagine a professional tightrope walker who has been working for 20 years and has survived. If he doesn't understand what he knows and doesn't know, he can't survive. He works hard because he knows that if something goes wrong, he'll die.

Anyone who survives knows that knowing what he doesn't know is more important than being smart.

Example: When you enter the investment market, you have to understand: in this market, there will be losses if there are profits.

5. Don't overdraw. Even Mozart couldn't manage that

Of course, what we all suffer from is a preference for complacency. The "real ego" can be used to refer to the agent who wants to act. For example, why doesn't the "real ego" exceed my income?

Once upon a time, a world-famous composer lived a miserable life for most of his life, and one of the reasons was that he constantly exceeded his income. That man was Mozart. If Mozart can't handle this paranoid behavior, I don't think you should try either.

6. 99% of optimistic accounting will go wrong

99% of the troubles threatening human civilization stem from optimistic accounting calculations. This financial personnel want to pursue pure mathematics, and they only want to focus on accounting results that are too pessimistic, but these accounting results are too optimistic.

99% of the problems come from being too optimistic. Therefore, we should build a more conservative accounting system.

7. Assets require more scrutiny than liabilities

100% debt is good and always has been. Assets are something to worry about.

8. Trust is the most important

The highest form of evolution in human civilization is an endless network woven with trust. I leave you to reread this point and reflect on the benefits in general.

9. Large investments require delayed gratification

Waiting helps investors, yet many simply can't afford it. If you don't have the gene for later gratification, you'll have to work hard to overcome your dissatisfaction.

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10. The way to learn is to read

Read as much as you can, and your analytical skills will grow. You'll also gain independent thinking and improve your critical faculties. You have two learning choices: school, which is imposed, and reading, which is chosen.

man reading book in a room with cup of cofee

11. About patience

Trying to do thousands of little things is hard. But try to do some things well and you'll get good results. A few good decisions can lead to long-term success. You earn money by waiting. It takes a lot of patience. Concentrate on getting some of your investments right, rather than trading every Nasdaq stock again.

Some people talk about the 20-80 ratio: focus on things where 20% of your efforts yield 80% of your results.

Cahrlie Munger vice president of Berkshire Hathaway Waren Buffet company

Charlie Munger (vice-president of Berkshire Hathaway Warren Buffet company) said:

"Buffett and I have done two things (to reduce mistakes). We spend a lot of time thinking. My schedule wasn't full and we sat down and couldn't stop thinking. In a way, we're more like academics than businessmen."

My system always sits and thinks for hours in silence. I don't mind if nothing happens for a long time. Neither does Buffett. But I think it's useful to keep looking for wisdom and finding the right way to handle it. Losing your cool will never work for you. You can apply this idea of finding wisdom and finding the right answer to your life. But it's hard to do. The essence of ordinary results is due to the ordinary. Calm down and think, seek wisdom, and transcend the ordinary.

Other people's thoughts are erratic. They're thinking about a date with their lover, luck, or glory. I'm always thinking about problems. My thoughts are stable, so when trouble comes, I'm ready."

I hope this article helps.

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Antoine Goldman - Eversind, for your success

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