In his latest interview with ValueWalk, Ian Cassel discusses how to manage the emotional side of investing. Here’s an excerpt from the interview:
Cassel: I am an active investor, which really means I am a stock picker. I’m never going to be right all the time. This isn’t a game of perfection. When I lose money it is because I didn’t do my research or control my emotions or a combination of both of those things. If you are a microcap investor, it is important to know what you own because the businesses are small. They are impressionable. And so their situations are evolving all the time.
You can’t just buy and forget them. You have to buy and verify your thesis to make sure it hasn’t changed in a bad way. So, a lot of my mistakes have been when I have taken my eye off the ball. Quite honestly even most of the winners I’ve had eventually couldn’t sustain their growth. So you have to have your pulse on the business. The other mistakes can be more emotional.
The emotional side of investing is something you can’t really learn in a book or a classroom. There are lessons that have to be experienced. It’s kind of a test of how you can sit quietly while your emotions are screaming at you to do the wrong thing.
Active investing is like navigating a ship across the ocean and the crew are sort of the company management team. The currents and the storms and the wind are the emotional component of that. Pick the right boat and the right crew and navigate the emotional side.
You can read the entire interview here:
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