Monday, December 25, 2023

Be A Learner, Not A Copier

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There is a huge amount of content on the internet of investors, traders, financial gurus, etc., showing their portfolios and the invested counters. These people, who I will dub as “content creators” (understood that some investment greats like Warren Buffett do not use social media to show, but for simplicity in this blog post I will lump them together as there are people covering his trades as well). It is interesting to see what they have, their rationale behind in getting the securities and their views going forward (OK, it’s like my “Inside The Bedokian’s Portfolio” series).

Nevertheless, I have had heard of some investors and traders who, for some reasons, prefer to copy or follow the above people’s trades and counter selections without giving much thought, even though some of these content creators had explicitly stated not to imitate their portfolios. As I had emphasised before that individuals are different with one another, and this extends to the investment-oriented characteristics like risk tolerance, suitability of investment philosophies and methodologies, etc. The worst thing that could occur is that the entry price point may be different between the content creators and the copiers themselves, and the latter sometimes may find being caught at a higher price level.

The “some reasons”, based from my observations and conjectures, are due to two main roots: laziness and greed, and these two are intertwined. In other words, it is a “free rider” issue, where I could just copy the transactions from the best and just see my bucks rolling in without lifting a finger (save for using it to click the buy/sell button on the brokerage platform). We need to know that for some or most (not all) of the content creators had gone through a lot of analysis work and effort to come up with the final buy/sell call, and they are sharing for others to learn.

Which comes to the key point of this post, that is being a learner.

As I had stated in the first paragraph, I would like to know why they wanted to invest (or not to invest) in a counter, and how they came out with their conclusions. We need to dissect and digest their reasonings, and compare them with our points of view. At the same time, we are also learning from their points of view and we may get some takeaways such as brand new perspectives and/or new guidelines to amalgamate with our own. This is what we should be doing, not blindly follow what they are buying or selling. In fact, a few of our invested counters were the result of these content creators (and also discussions with other investors and traders).

And remember, learning is a never-ending process. You will be surprised that there are always new things to uncover, even though you think you had covered a particular topic, and this applies to all, not just in the realm of investing and trading.

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