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


5×5: Five articles summarised in five lines 🌟

  • Framework: What kind of investor are you?
  • Lessons: Things that most successful investors do
  • Psychology: A case for mind over markets
  • Buffett-ism: Best investment against Inflation
  • F.I.R.E.: Don’t punish yourself today for a corpus of tomorrow
  • Pop Quiz #8: A quiz question that can win you a little gift from us!

Know where you fall on the spectrum? 🎯

  • 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

Pop Quiz #8 ⚡️

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Eshay Rangdol used to work as a trekking guide in the region, but when X opened a branch in Leh in 2017, he jumped at the chance to switch careers.

His daily routines involve long winding roads, extremely low temperatures, and the lack of house numbers. He now serves the monks and motorcyclists alike.

Leh is the highest place in the world where X operates. Identify X.

Last week’s quiz results💡

Answer: Reliance (Dhirubhai Ambani Lakhibag Amrayee)

Quiz Winner – Bhavya Bapna

⚡Join, probably, the best investment community in India⚡

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

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