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After 6 months on this platform, I can affirmatively say that my returns would not be near where they are today without the wonderful people and incredible information I have found on Fintwit.
Here are 6 valuable lessons that I have learned in my 6 months on Fintwit!
Here are 6 valuable lessons that I have learned in my 6 months on Fintwit!
(1) Study the greats, but take the time to develop your own strategy. - This year, my investing strategy has certainly evolved. I have studied the investing strategies of great investors like @JonahLupton @chamath @BrianFeroldi @saxena_puru @CathieDWood & many others, and I...
have learned incredible lessons about portfolio management, concentration vs. diversification, top trends for the 2020s, and how to achieve higher returns, all while learning about a plethora of new companies. In studying these great investors, I have realized that each has...
his/her own perspective, & that their portfolios reflect different values, passions, & levels of financial comfort. I have informed my own strategy with each of these investors' but have recognized that blindly copying trades, concentration strategy, or anything else is unwise.
(2) People are always trying to predict the market, and more often than not, they're completely wrong. - Inevitably, the market will crash at some point in the future. Yet, also inevitably, some companies will have days where they are + 5, 10, or 20%. Trying to time the market...
especially based on the predictions of some random twitter accounts or (even worse) some guy on CNBC who has made a career out of falsely claiming the market is going to crash, can be very costly. Sure, SPACs may crash at some point, so may SaaS, genomics, or any other sector.
But if you're buying good companies & are invested for the long-term, trying to predict the market or short-term stock movements can cost a lot of money. It never hurts to read an argument you disagree with, but someone says every day that the market will crash tomorrow.
(3) Buy what you know. - In the aftermath of $FSLY 's bad quarter, or the $LKNCY scandal, or the $AAPL privacy announcement that scared people out of $TTD, it quickly became evident that a lot of people who were panic-selling these companies barely even understood what they do.
This is not to say that selling them was necessarily a mistake, but rather that some people who did not truly understand what these companies did were now selling them (or in some cases adding to them) because of an event they hardly understood.
Admittedly, the lowered quarter guidance for $FSLY forced a reality check for me about what I truly know. Typically, I try to buy stocks that I think I will understand better than or at least as well as other investors because of my knowledge of the company or industry.
For example, I have spent a lot of time studying Latin American politics and culture, so I am very comfortably invested in $STNE & $MELI. Likewise, I have family members who work in the real estate industry, so I feel like I can understand events surrounding $RDFN, $OPEN, etc.
This clearly was not the case with some of the SaaS stocks I own, however. As @TMFStoffel has said, if you cannot explain the company you own to a kindergartener, you shouldn't be invested. I realized I barely understood why $FSLY was good, how it was different from $NET, and...
what other SaaS stocks I owned like $MDB and $AYX even did. So I did some research on $FSLY and $NET, so I can understand what they do adequately, and I reduced my position size to something I was comfortable with for an industry I didn't quite understand as well.
(4) Pay attention to market cap. - This one seems obvious, but it is frequently overlooked by so many investors, myself included. All the time, I see people on this platform asking for companies that people think will 50x or 100x over the next decade.
Every time, without fail, people respond with illogical answers like $SE, $SHOP, $SQ, and so on. These are all great companies, and combined they make up more than 15% of my portfolio, but checking their market caps allows me to be realistic with my expectations.
Moreover, when looking at new companies, especially those for my "moonshot" basket of stocks, a look at the market cap can help determine whether or not the company is really a "moonshot."
(5) Someone's returns are always going to be better than yours. - Whether it is a great investor who has been doing this way longer than you or a random guy with $1 million of $TSLA options, someone is always going to post a better return than you.
As I think so many people who are generous enough to share their holdings and tips on this platform have realized, investing is not a competition. At the end of the day, this is about giving myself enough money to live my life the way I want to.
If I am earning enough, who cares what anyone else is earning. It's valuable to study the portfolios of those doing better. I cannot even begin to describe the amazing info I have gotten from studying others' portfolios, and tools like @JoinCommonstock have only helped that.
But, at the end of the day, it does not materially affect your life in any way if someone else is returning 20, 50, or 1000% more than you. All that matters is that you are having success with your own portfolio.
(6) Finally, take everything you read on here with a grain of salt. A random account saying something you have never heard before about a company or the market may not be truthful, and doing your own research is always necessary.
That being said, just because someone doesn't have a "K" next to their follower account does not mean they cannot provide valuable information. There are dozens of accounts on here that are criminally under-followed. Some of my favorites: @jablamsky @TheMarkCooke @BahamaBen9...
@DWL_Investments @RedCoatChicago @CCM_Ryan @BornInvestor @albertwang23 @dannyvena @EMparadigmshift @james_carter89 @Kiwi_Investor @MazwoodCap @ParrotStock @caleb_investTML & so many more!
Thank you so much to everyone for an incredible six months and I cannot wait for all of the new lessons and skills I will learn during 2021!
