Value investor Vs Price Investor, What Buffett said about beating Inflation, Mind over markets & More

• Investment philosophies boil down to two broad concepts: value-led & price-led.
• Valuation-led investors are focused on the features of the underlying asset (think Warren Buffett) while Price-led investors are focused on price and the behavior of other investors (think Momentum investing)
• Most approaches sit in between this spectrum of price-led & value-led investing.
• Understanding what type of investor we are (and are able to be) is absolutely paramount to making prudent and behaviourally consistent choices.
• If we don’t know or are mistaken, then we really have no chance of making good decisions.

Read More – All Investing is About Valuation or Price

Three things to better your investing game 🤙

• The goal of investing should be to eliminate things that have a high probability of producing losses.
• Three things stand out among the philosophies of most successful investors.
• [1] When things don’t happen immediately with an investment it’s easy to get frustrated, think something is wrong, and give up on it. Be patient.
• [2] Markets can build your confidence and crush your hopes all in a matter of months. Stay humble.
• [3] Some of the biggest investing mistakes would be avoided if investors prioritized risk. Risk first.

Read – Addition by Subtraction

Investing is more in your mind, than markets 😇

• Markets are hard — you can’t predict their behavior due to the large number of variables driving the market.
• Losing money is stressful and it’s a difficult time to make intelligent decisions.
• Emotions drive the stock market over shorter time frames while fundamentals drive them over longer time frames.
• The best time to buy stocks is often when it feels the worst.
• Two things: (1) When do I need the money?, (2) How much can I afford to lose?

Read – The Two Things That Matter Most

You’re your best investment ☘️

• How do I invest in a way that beats inflation? Buffet’s answer: Be exceptionally good at something
• It makes sense then to do something so well that you get paid more and more for it.
• If your skill can’t generate more and more money – cross skill, upskill, and spread your wings.
• Creating a huge portfolio that lets you live off dividends (& interest) is much more difficult than making money through your skills.
• If you have a good amount of money, more than you need, you shouldn’t be concerned about inflation at all.

Read More – Buffett: Be exceptionally good at something

A personal story on the path to Financial Independence 💸

• Don’t let saving money became an obsession and miss out on actually living your life.
• Don’t punish yourself for frugality and invest in a bigger retirement fund.
• Understand yourselves, invest as per your psychology and live a balanced life.
• Happiness and Sadness revert to mean – hedonic treadmill theory.
• Progress influences happiness.

Read – Don’t Make Extreme Sacrifices on your Pursuit to FI