I was thinking about this in the shower today, so use that as reference for my state of mind.
I've been re-reading some of my "Trade" posts. The rationale for buying or selling tends to be pretty weak. Some of the utility purchases have decent write-ups, but the rest are extremely generic and/or lacking any real insights.
But that's about the amount of work most of us do in our own personal accounts. We know a few tidbits about the industry and/or company. We have a general sense for valuation. And we make a bet. Thankfully, we tend to make a lot of smaller bets. If you own 30 companies (like the Dow Jones Average) in equal weights, each one would be 3.33% of your portfolio. Even if one goes to zero, you're not going to the poor house. So long as you have a semi-diversified basket of stocks, the amount of diligence required isn't necessarily high. Especially if you don't have a benchmark or performance mandates.
With all of that being said, I might try to write more about each company I buy or short. I've been a professional investor since 2009 and know a lot more about companies, countries, and economics than is being portrayed in my "Trade" notes. It's hard in the heat of a trading day to write much. I'll need to figure out the best way to do it. And might fail often.
Nonetheless, I doubt most of you do half as much due diligence as me in your individual stock investments as me. And that's ok. There's a catch-22 of knowing more means you're more aware of the risks and therefore more afraid to make moves. So you want to know enough to be aware of the major risks but not so much that you worry about which way the wind is blowing.
Any thoughts? Am I writing enough? Do you do more work than what I write?
I've been re-reading some of my "Trade" posts. The rationale for buying or selling tends to be pretty weak. Some of the utility purchases have decent write-ups, but the rest are extremely generic and/or lacking any real insights.
But that's about the amount of work most of us do in our own personal accounts. We know a few tidbits about the industry and/or company. We have a general sense for valuation. And we make a bet. Thankfully, we tend to make a lot of smaller bets. If you own 30 companies (like the Dow Jones Average) in equal weights, each one would be 3.33% of your portfolio. Even if one goes to zero, you're not going to the poor house. So long as you have a semi-diversified basket of stocks, the amount of diligence required isn't necessarily high. Especially if you don't have a benchmark or performance mandates.
With all of that being said, I might try to write more about each company I buy or short. I've been a professional investor since 2009 and know a lot more about companies, countries, and economics than is being portrayed in my "Trade" notes. It's hard in the heat of a trading day to write much. I'll need to figure out the best way to do it. And might fail often.
Nonetheless, I doubt most of you do half as much due diligence as me in your individual stock investments as me. And that's ok. There's a catch-22 of knowing more means you're more aware of the risks and therefore more afraid to make moves. So you want to know enough to be aware of the major risks but not so much that you worry about which way the wind is blowing.
Any thoughts? Am I writing enough? Do you do more work than what I write?
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