Investing - The Journey
I write this blog with the hopes that you will understand the flip side of the glory of investors you hear about. For every success story out there I dare say that there are multiple fold times more of failures and that’s the truth you need to hear.
I’m sure as you read the intro to this blog you’ll probably be not too keen to read on, after all people like a story with a good ending especially if it could be applied to themselves, myself included. But nevertheless I shall advocate for the unsexy side and it might do you good to give it a quick read.
With the advent of technology, stories of people becoming rich overnight has been more prevalent. I myself rode this wave up and have been fairly successful, though still pale in comparison to many of the stories you might hear, I did manage to turn 5 figures into 6 figures in two years. I will be revealing the full details of my investment portfolio at a later point down the road, so do check back if you’d like to know about that. I say that to give some context and credibility to myself, I’m not writing from a position of failure.
Let me ramble a bit myself. I fell in love with the concept of investing about 7 years ago, the promise of untold riches and how you could make money unconventionally. I started with the US stock markets and through my walk I found options. This gif, would be a exact depiction of my mental state at that point.
Now understand this, at that point in my life I had very little capital, some might call me a “hundrednaire”. Great success huh? So the only thing I could do was to work and increase my capital, I had a job and plowed 90% of my earnings into the market. With the fresh capital I traded options, even to the point of borrowing margin. With some success I grew my net worth to the thousands. So I grew cocky.
Fast forward a few years, I had success trading, but still it was Too. Damn. Slow. A common phenomenon many of you will experience in your journey. So I pitched the idea to use other’s capital to expedite the returns, foolish? Well, I wouldn’t say so, but it was definitely the make or break period for me.
Mind you that through out the years I have never taken profit out into my bank account, I was living like a pauper and to be honest till this day most of my money is tied up in investments, 90% would be a lowball figure. Continuing, I threw my freshly acquired capital from people who trusted me into the markets. Buying options at a dizzying pace. This was in mid 2019 going to 2020, I was making money hand over fist. Then it happened, the COVID crash.
Everyday the stock market was taking a deep dive, they even had to circuit break the stock market several times in a day. Which if you didn’t know what that means, is that they had to halt trading because the markets are dropping too fast. The narrative was this at the start “hey, don’t you know you should buy when others are fearful?”. So guess what, I bought the damned dip. Well, the damned dip, JUST. KEPT. DIPPING!
Slowly the narrative shifted, it now became “we are in depression”, “the future looks grim, stocks could be on a downtrend for years”. I‘d like to take note that, the ones saying these were the so called “gurus” and “experts”. I saw years of profits gone within a span of less then a month. I kid you not, my hair literally turned white, just the one (which I still have till this day btw).
At the end of it all I remained with 20% of my original capital.
Today, I’m convinced that true investors are born during moments of adversity such as these. A test by the markets if you will. A blood sport, for every winner there is a loser on the opposite side. Many of the people I knew who invested utterly gave up, despair was tangible for many of us. The market has weeded out the weak from the strong.
READ THIS: I’m certain that you too, will face adversity such as I have. It is a rite of passage. Do note mine happened on my 5th year of investing, a pretty substantial amount of time.
When you do face such adversity, persevere. Remember the market works to weed out the weak, be ever vigilant and invest in fundamentally strong assets. Which is why I never feel envious when I hear of success of people investing in assets like AMC, GME, DOGE coin or Shiba inu. Oh yes, and I did managed to gain back all my losses from the COVID crash.
So if you’d wish to embark on this journey, be prepared and equipped for a journey. Consult people who have been consistently correct, do note that no one can be 100% correct all the time. Have a longer termed mindset.
With all that have been said I’d like to leave you with a quote:
“People overestimate what they can do in one year, but underestimate what they can do in ten”
Stack prudently,
Daniel