Great article by Ian Cassell at MicroCapClub titled, Don’t Compare Yourself To Others.
Ian covers two important issues that all investors can relate to. The first is how to sit still while others are making money, because you can’t find stocks that fit your strategy. The second is how to live through a drawdown when your portfolio is underperforming.
Here’s a small excerpt from that article:
To be a successful investor you have to have a philosophy and a process you believe in and you can stick to even when the times get tough. This is very important. If you don’t have a courage of your convictions and patience and toughness, you can’t be an investor. Because you’ll constantly be driven to fall in line with the consensus by buying at the top and selling at the bottom.
Every investment approach, even if skillfully applied, will run into environments for which it is ill suited. By and hold. Growth stocks. Value stocks. Small stocks. Large stocks. Foreign. Domestic. And that means that even the best of investors will have periods of poor performance. Nobody performs great all the time. Buffett was considered over with. Now, even if you are correct in identifying a divergence of popular opinion from eventual reality, that varying perception that I mentioned, it can take a long time for the price to converge with value and it can require something that acts as the catalyst. Underpriced does not mean “Going up tomorrow.”. Overpriced does not being “Going down tomorrow.”. And we, everybody has to know that. And in order to be able to stick with an approach or decision until it proves out, which can be a long time, investors have to be able to weather periods when the results are embarrassing. This can be very difficult.
You can read the complete article here.
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple:
