The stock market is not your friend. Instead, the market awakens a dangerous emotion — fear. Fear is not your friend, either. Here are some simple tips that can make you a better investor.
Tag:
Behavioral Investing
Investors are prone to two opposing fears which can impair the ability to make rational decisions. To reduce this, it is advised to turn off business TV and focus on how news affects the value of a business. This will help filter out the noise and lead to more rational decisions.
Investors often make irrational decisions due to fear of missing out or fear of loss. To reduce irrational decisions, investors should avoid constantly watching their portfolio.
Stock investors must remain rational and guard against fear when approaching the stock market. Fear of missing out and fear of loss can lead to poor decisions which can result in buying high and selling low.
Few people have had as great an impact on me as an investor as Nassim Taleb. His books explore the role of randomness in life and the stock market, and I incorporated his concept of “soul in the game” into our investment philosophy.
Today I am going to share with you an article I wrote after the January 2018 stock market volatility. It’s as relevant today as it was then.
People tend to forget that stock prices fluctuate due to many factors and not necessarily the true value of the stock. It is important to focus on the actual value of the company when investing in stocks rather than the market prices to avoid becoming a “degenerate gambler”.
I want to let you in on a small Wall Street secret: No one knows what the stock market will do next.
Guy Spier is a tremendous value investor who happens to be a good friend whose company I truly enjoy. He is the most cosmopolitan person I know. He was born in South Africa, spent his childhood in Iran and Israel