Becoming a great investor:

How do you become a great investor? 

How do you get to a place where your returns in the market consistently beat the index over long periods of time?

First is reading. You have to be a voracious reader of everything. I think I’m on that path, having read 100+ non-fiction books in the last few years. But that’s not good enough because you have to constantly be learning.

You have to assume you are stupid and that your decisions will be wrong. Protect your money from your own ego and your own delusions. No one that is that smart, even the best in the world. The more they think they’re smarter than everyone else, the more they’ll suffer when everything turns, as it always does.

Study the greats. Currently reading a book called ‘Richer, Wiser, Happier’ by William Green. The book discusses the best principles for investing and life from the greatest investors in the world. While reading the book, it’s becoming more and more clear to me that I’m on the right path. A lot of these principles the investors are talking about are ones I’ve read in many other books as well. 

Patience, humility, being humble, taking calculated risks, bet 1 to make 5, never lose money, buy when everyone is selling, sell when everyone is buying, etc. There are so many countless ones these greats have mentioned, but the thing I always come back to, is they all did it their own way.

I have to do it my way. I cannot let anyone else’s expectations of what I want to achieve or how I should invest pollute my mind into thinking I should be like them. I need to create a strategy and portfolio that works for me.

This is my conundrum right now and the more I’m reading this book, the more I’m realizing that it’s best to run your own book. Do your own thing. Don’t give power to others because then they have ultimate control over your decisions. You may think you do, but you don’t because it’s not your money. If you’re only running your own money, then no one can say anything.

By doing that, will you ever be considered great? Tbh that’s probably not true because if you can consistently showcase your returns over time in public and get people to audit you, you can build your own track record. Sure it won’t be built at a reputable fund that has existed for a while but who cares. You don’t need the extra ego boost. At the end of the day, it’s about results.

Talk is cheap. I can say I want to be a great investor but until I do it, how should I know? Why should anyone trust me? Building trust takes time and it takes results.

My results will slowly soon speak for themselves when the market corrects and the bets I made pay off. My margin of safety is precisely accounted for. Because this could literally be a once in a lifetime event, I’m perfectly positioned to account for it. For example, instead of just buying shares, I’ve bought options contracts with far expiry dates to account for the margin of safety of today’s prices. Obviously this is highly risky and not what most great investors would do, but at the same time, they didn’t start their investing careers living through an event like this.

The future is uncertain. Yet the past holds a lot of keys to the future. For example, this situation looks very similar to what happened in 1929. Not to say that what will happen this next decade will be like the 1930s, but everything that’s happening now around the world has happened before. Ray Dalio talks about this beautifully in his upcoming book – The Changing world order, which you can find for free on LinkedIn.  

Yet because of the money printing and debt the US Fed has created over the last decade, this decade could be similar to the 1970s - the lost decade where stocks were completely flat where inflation got up to 22%. Think about that number for a second - 22% interest rates. That is absolutely crushing in today’s environment. 

The market risk is too high right now and all the greats know this. Even reading this book, it’s clear all the smart investors understand this environment in the context of history. They know we’re in a massive bubble, they just don’t know when it’ll go. But as it falls when the meme stocks rise, they’ll be waiting in the wings with cash on their hands ready to invest in companies they’ve been researching that are super cheap.

This is my strategy - make a lot of money betting on the meme stocks and the market to crash, then flipping it around to invest in quality companies at discounted prices. Today, I don’t know what those prices are because I haven’t done the work. But you have to do the work. You have to read the financials, read the annual reports and watch the interviews. Do your work because there is no shortcut to greatness.

To be great requires sacrifice. It requires using your time in a way that’s most beneficial to you. If/when this meme stock/shorting the market bet pays off, I’m going to use my money and time to further invest in myself and do exactly what I want to do on my own time. Working for someone else is fine if you enjoy it, and I do love my job, but writing, podcasting, journaling and reading is exactly what I want to be doing.

You have to create that life for you. You have to do the work to get there. You’ve been preparing your whole life for this moment and I know you’re ready for it. While a lot of people have been letting days go by, you’ve just been preparing. Waiting for the right moment. 

The moment is upon you.

Now it’s time to show the world this bet isn’t a one off. 

It’s time to show everyone you can be one of the best investors in the world.