Beware Of Your Natural Tendency To Want To Tweak Our Investing System

Why your natural tendency to tweak our system will end up throwing a wrench in the gears that make up the system.

Common ways investors mess up our investing system and end up botching their long-term results:

  • Cherry picking
  • Biases
  • Adding to or taking away from the system
  • trusting unseasoned, novice thinking over seasoned advice that's designed a system with many facets/factors in mind

God bless!

Comments (19)
No. 1-2
nawajyoti
nawajyoti

Haha... that is so very true Sean... because of course I have been tempted to do something like that and previously have done so .. i have to admit.. i am still in cig ..!!...thanks for the great video!

17 replies

Sean Hyman
Sean Hyman

Editor

Thanks.

CIG is in long-term wave 2. Should be gearing up for wave 3 soon. Once the Brazilian real has put in a bottom, these Brazilian stocks will be able to stage their next rally.

BridgetC
BridgetC

Is it at the bottom of wave 'c' ? (Within wave 2 .. or am I just getting confused ... ?)

Sean Hyman
Sean Hyman

Editor

Not sure I know what stock you're referring to.

BridgetC
BridgetC

Apologies. CIG .. (as in the thread). Looks like it bottomed in January 2016

Sean Hyman
Sean Hyman

Editor

Yes, you're correct. It's in wave C towards the bottom of a major wave 2.

BridgetC
BridgetC

Thanks Sean. Looks like I may be slowly learning something ... (white arrows aside ;)

Sean Hyman
Sean Hyman

Editor

haha. Yes, you are. You're doing well.

BridgetC
BridgetC

Good teacher :)

Sean Hyman
Sean Hyman

Editor

Thanks!

BridgetC
BridgetC

The stock chart lesson you gave has been so helpful. Made me also realise that, as so often in life, the learning occurs in the 'downtrends'. We look with hope for signs of spring in the late winter, but we just enjoy the spring and summer when they arrive. We don't tend to look for signs of winter then, but nevertheless can start to prepare for another 'season' later in the summer months. So it seems with stock markets. *Poetic discourse ends.

Sean Hyman
Sean Hyman

Editor

Thanks. Yes, both up and down moves happen in the greatest of companies. Mentally, many people expect that a great company will only or mainly have upside and not decent sized pullbacks. But that's misaligned expectations on their part. If they'll realign those expectations they can go from being a novice investor to being a seasoned investor, in time. If they keep the thinking that "seems right to them", then they'll, at best, remain a novice investor. So it's my job to teach, it's their job to believe it and implement it. Unfortunately, I know that everyone won't do their part. But it's like the Bible says...."to those who have ears to hear"...

With every message, everyone won't choose to get it. I'm glad you're choosing to get it and I'm glad its been conveyed in a way that you're understanding it. I'm glad to hear that.

BridgetC
BridgetC

Has not always been the case. But wanted to persevere :) Thanks Sean.

Sean Hyman
Sean Hyman

Editor

Yep and you did end up deciding/choosing to persevere. Agreed.

BridgetC
BridgetC

I'm not a quitter :) Unless my health and wellbeing need me to be (!)

Sean Hyman
Sean Hyman

Editor

Glad you've stuck with us.

BridgetC
BridgetC

Thank you: It was more my ability to determine whether or not I should buy etc, and then to unravel the resulting downturns, and stand firm in what I'd decided upon :) But as I say, these are times of learning :) I quite like charts. I can memorise them to an extent. So that has helped, plus the time to work it through.

Sean Hyman
Sean Hyman

Editor

Awesome! Yep, charts are what I first got my mind around too.

BridgetC
BridgetC

Sorry to be so dim, but does 'cherry picking' (in this context) means choosing which stocks to buy ? If so, I have no choice but to do that. Took me 2+ years to build up the present portfolio (UWR and AP). 'Biases' I presume mean preferring one stock over another because of what one has heard. 'Adding or taking away from the system' I also don't understand ...(again apologies !). Please could you explain :)



shmcc2000
shmcc2000
18