We Are All Fighting The Same Battles

We are all fighting the same battles: Riding a winner deciding if you should hold it. Holding a loser deciding if you should sell it. Sticking with a stock that has gone nowhere for quarters or years questioning your thesis. You aren’t alone.

The main reason stock picking can feel so isolating is your short-term and long-term report card is staring at you in the face. 

Stock picking is an individual sport. It’s you against the market and your emotions. You can’t blame your results on anyone else. Even when you have a team around you, there is no one else to blame for results but you. It's also why it's the greatest game in the world.

We log-in here or X or anywhere and you see other investors crushing it and taking victory laps on stocks you don’t own. You then start comparing the worst of who you are against the best of everyone else and second guessing yourself. We are all running a marathon even though we love to compare ourselves to whomever won the last lap. I’ve always loved Terry Smith’s comparison of investing to the Tour De France. 

The mind games are real. Investing is 5% intellect and 95% temperament. It's a test of how well you can sit quietly when your emotions and comparisons are screaming at you to do the wrong thing.  

When stocks go up all you see is the upside. When stocks go down all you see is the downside.  

Winning blinds you to risk. Losing blinds you to opportunity because you are focused on surviving today. 

Holding losers is easier than holding winners. Why? Because losers always look cheap.  

Holding winners is hard in small stocks. Why? The moves can be fleeting. The shelf-lives shorter. 

Every stock picker wins and loses at different times at different seasons for different reasons. And only in a sport like stock picking can the wins feel as lonely as the losses. It’s also what makes MicroCapClub a special place and why community, relationships, and networking is so important. We like to help others celebrate victories. 

It’s in the highs and lows of investing where most mistakes are made. Over-confidence and under-confidence cause every investor to over-reach for returns. 

At your highs you double down on what was working last year at peak valuation or gunsling into a new area where you lack competence. At your lows you keep averaging down into losers or sell things at lows to buy into a new things at highs only to get cut in half again. 

This past week I saw a well-known investor speak poorly about another. The older I get the more annoyed I get at investors that love to sound smart by teeing off on investors that are struggling that operate a strategy they don't agree with. Focus on your own game or the stock market will take aim at you next. It loves to destroy egos. There is a reason the best investors are the quietest. 

A good rule of thumb is to be quieter than you want to be. Don't give people a reason to root against you. It's an asset when people can't tell whether you are winning or losing.

You see it most vividly in how we treat those closest to us.

How often do you let your portfolio direction dictate your mood? I know I’ve been guilty of this.

“Family, we are going out for steak tonight!”

 or 

“Family, here is pack of saltine crackers to split amongst yourselves.” 

How much precious time has been stolen from you even after the markets closed for the day or week? You are thinking about the markets instead of living in the present with your family. I know I’m guilty of this. We all are. 

A big part of successful investing is not letting the short-term direction of your portfolio dictate your attitude, effort, or how you treat people. You can't let the market become your life or you will have a very shallow life.

We are all fighting the same battles. 

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