Whatever happens in your career as an investor, you should never do this:
The thing that sucks, however, is everyone will experience it at least once.
I like to call this journey, “Trader’s Inferno.”
I don’t care what kind of education you have or what kind of books you’ve read, you will, at some point within your first few years of investing, find yourself in a whirlwind of bad decisions.
There’s no avoiding it. And there’s no market that has less or more of it. Stocks, cryptocurrencies, forex, whatever… it’s going to happen.
It usually happens when you’re a rookie in the markets. Maybe you think you understand how markets work. Maybe you’re young, naive, and overconfident. Maybe you think you found a great trade because of a “hot” tip. Or maybe you think you understand risk, and, I mean how bad can it get? You can always “just” sell.
In markets, the only way to learn is through experience. It’s being there first hand with skin in the game. I would argue every great investor you’ve ever heard of learned their greatest lessons during their youngest days of investing when they made their dumbest mistakes. I even think this is true for someone like Warren Buffett. And I really can’t stand using Buffett as an example. It’s just too easy.
But I once read Buffett estimated his worst investment cost him $200 billion in potential gains. That investment was Berkshire Hathaway, the holding company he runs today. You can’t say quotes like this without getting burned or seeing the repercussions first hand:
“It’s much better to buy something that is good at a fair price than something that is cheap at a bargain price.” – Warren Buffett
I don’t think this post is going to help anyone avoid entering a string of bad investing decisions. That’s apart of the game.
My guess is you’re reading this now because you’re going through it or because you already made it through. If anything, this post is a eulogy to those who want to praise the old days of dumb decision making, and just how funny, absurd, and amazing it is you did the things you did at one point in your career. This post is also a church with open doors for those going through it now. You’re not the only one who’s ever made a dumb trade or investment.
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