December 1, 2017

"Darn! I'm wrong again."

I've said this to myself for the 100th time.

Do you ever say that to yourself?

When I make mistakes in the market, I like to think of it as "paying for tuition".

I'm learning by trial and error.

I'm learning by doing.

And I would bet a good chunk of my money that you think the same way too.

And guess what?

Making mistakes is the most expensive form of learning.

Since 2008, I've placed well over 5,000 trades and counting...

I like to think that I have made all the mistakes there are to investing.

From a newbie to a pro, I have put in the work and grind my way through.

Tested. Tried. Experimented with every idea I come across.

Success does come with a price.

But why should you care if I fail or not?

Because I'm about to share with you every single mistakes I have made as an investor.

So what?

So you don't have to pay for tuition like I did.

It's painful and this post is designed for you to avoid paying tuition!

Ready to get started?

Let's rock and roll then.

In the next little while, we will be spending quite a bit of time together.

So if you like any of my mistakes below, please do give me a comment, a share or a like! : )

#1: When Short Term Becomes Long Term...

Have you ever went on a date?

Like a Tinder date?

(For the oldies, it's the latest online dating app as of Nov 30 2017)

If a guy takes you out for 15 minutes coffee and suddenly turns into...

A movie night with a 3 course dinner plus getting a late night snack?

I mean, it's fine if you are enjoying the date.

But what if you are just hating the guy but you are too shy to say no?

Then, what happens?

You are just STUCK there with the same guy who you are not interested in.

Same for our male friends here.

You are stuck with the girl you don't like because you don't want to say no.

So?

You stick with the date until the day is over.

And that's how most people approach investing.

You start off thinking...

"This is going to be a day trade!"

You click BUY.

HORROR! Market goes against you.

And you say to yourself, 

"Well, why don't I just stick with it for a while and see what happens..."

"Maybe it will work out..."

So instead of a day trade, it turns into a weekly trade.

Instead of a weekly trade, it turns into a monthly or even yearly trade.

As time goes on, you are stuck with more and more investments that are going down hill.

You are spending more time with guys/girls you are not interested in.

So what should you do?

Start with a long term mindset.

Start with a longer timeframe like 5 years.

Then work backwards.

For example, I expect an idea to realize in 2 years...

I give myself TWICE the amount of time - 4 years.

If I expect an idea to realize in 1 year...

I give myself TWICE the amount of time - 2 years.

If I expect an idea to realize in 1 month...

I give myself TWICE the amount of time - 2 months.

Comprendre?

(It means ... Understand? in French. )

(Because I'm totally a French Chinese trying to look cool...)

(No, I'm not French.)   : P

If you like this tip, give us a share or watch the free training.

If I expect an investing idea to realize in 6 months, I give myself TWICE the time, 1 year. #investing

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#2: Eating too much food..Dating too many girls...

Have you been to an all you can eat?

It's a buffet. 

Eating as much you want in 2 hours or so.

It's pretty popular in North America

In fact, the concept of "all you can eat" was invented in Las Vegas back in 1946.

Anyways, you get the idea.

You eat, eat, eat ,eat, eat as much as you can within 2 hours.

This is similar what's happening in the investing world today.

Brokers are prompting short term trading...

The most popular analysis is technical analysis which is used for short term trading.

A lot of people are looking for what's the #1 stock that will be pumped and dumped the next day.

A lot of people are just looking for a quick gain.

A lot of people are not thinking ahead, not thinking long term.

It's like dating. 

How do you build a quality relationship if you are dating a different person every day?

How do you build a long term relationship if you are seeing 10 girls at once?

Same for investing.

Instead of looking for the quick win, find the great companies.

Instead of chasing after the latest momentum stock, find business models that will last for years to come.

Instead of using technical analysis alone, look at the fundamentals of the company.

Imagine you are the owner of the company.

Would you build this company?

If the answer is yes, then own it.

Then, it's a matter of timing and waiting for a dip.

This is how Warren Buffet invests.

This is how I invest.

Is this how you invest?

If you like this tip, give us a share or watch the free training.

How do you build a long term relationship with a company if you are always going in and out?

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#3: Messy room? Messy Return.

Did you ever lose something?

If you have a messy room, you know exactly what I'm talking about.

It's almost impossible to find something if you have a messy room.

Here's a photo of a messy room (maybe back when you are still a teenager)

Can you spot the black and white sock in the photo?

If not, don't worry.

Most people can't.

Why? 

Because - it's too messy!

Same goes for investing.

When I first started out, I had a really really messy chart...

The photo below is not my exact chart but it looks something like this:

CRAZY, right?

What are you suppose to see?

The better question is, can you even see?

You brain can only focus on one thing at a time.

Maybe 5 things at most.

If you have a chart like this, instead of getting more information out of it..

You are getting less out of it.

You are getting tired faster.

You are overwhelmed by information.

There's already enough bullshit and misinformation out there...

You don't need it on your chart as well.

So?

I cut it all down. 

I cut down all the indcators that I used and I started from scratch again.

I questioned every indicator I put on the chart.

Here's what I end up with...

Simple and Easy.

If you want this template, you can grab it here for free.

I also created a series of video and it teaches you how to use every single indicator on this chart.

You can join the free course here.

A chart is suppose to help you see important information.

Not add to your confusion.

There is already enough price data which you can never comprehend all of them. 

Indicators are suppose to filter and identify only the important price points.

That's it.

Once you get the chart template down, you can focus on what's really really important.

Information outside of chart.

Yes, learning how to read the chart is only your first step.

The chart does not capture all the information of this world.

And it is the information outside of chart + reading the chart is where money is made.

So?

Keep you chart clean.

If you like this tip, give us a share or watch the free training.

Investing Tip #3: The chart does not capture all the information of this world.

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WHAT? You just reached the end of the post?!

This post is still a work in progress.

So be sure to come back often and check for updates.

Meanwhile, you might be interested in some free stuff:

How about the 12 most important lessons of investing I've ever learned? Check it out here.

Or, how about a free crash course on technical analysis? Check it out here.

Finally, you can always subscribe to my YouTube channel for more free training. Check it out here.

If you like this post, give me a share or a comment!


About the author 

Eric Seto

Investor, CPA (Canada) based in Hong Kong and Vancouver

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