When Long-Term Investing is a Bad Idea

Here are few things I thought were worth sharing with you:

• Long term investing is a good idea. Forced long term investing is not. When your premise does not work out, or you no longer believe in a stock, you must sell, even if it means a loss. A lot of investors hold on to bad stocks just to get their “money back.” This, I believe, is one of the biggest reasons to lose money in stocks. Remember that the deeper you fall with bad stocks, the more you must gain back to get your money back. And it is often a bad idea to try to get your money back the exact way you lost it.
  
  When it comes to losing stocks in your portfolio, always remember the first law of holes – If you find yourself in a hole, stop digging.
   

• From the archives: Zoom Out, Baby, Zoom Out –
  

  Much of the time, in life and in investing, we would be better off zooming out than zooming in. Rather than being ticker watchers of our own lives, and rather than zooming in and magnifying and thus worrying about the daily volatility in our stocks, we would be better off thinking about our lives and investments as pale dots that are just specks on the canvas of eternity. Within this, if we keep doing our work well, the daily motions and volatility that we pass by must not worry us therefore.

• We must be antifragile, writes The Daily Stoic –
  

  The world is a cruel and random place. Our plans are dashed. Our systems are broken. People we love die. We lose what we have built and what we have so carefully saved and invested.

  So much of what happens is out of our control: Pandemics. The markets. Supply chains. World leaders. What our neighbors do. We are drafted to fight in wars, to bear huge tax or familial burdens. We are forced to admit defeat about the thing we wanted to win so badly.

  This hurts. There’s no denying that.

  A Stoic heals by focusing on what they can control: Their response. The repairing. The learning of the lessons. Preparing for the future. It is in this that we become, as Nassim Taleb has said in his wonderful book by the same name, antifragile. We become better because of what we went through, better than if we had resisted and never been broken in the first place.

• Many theories have been floated about a farm economy-fuelled revival. Those hopes are unrealistic –
  

  …it is worth remembering that the share of agriculture in the Indian economy has been falling over the years. It had stood at 54.1% of the economy back in 1960-61 and has come down to 13.4% in 2019-20. The question is: How can a sector, which is anywhere between one-seventh and one eight of the overall economy, revive the country’s economic fortunes?

• How bicycles transformed our world. Coronavirus has sparked a two-wheeled transport boom in many parts of the globe. But this isn’t the first time bicycles have been the hottest machines on the market.
   

• Why Microsoft wants Tiktok? It’s the data, stupid!
   

• Seth Godin writes on the two kinds of decisions worth focusing on –
  

  HARD ONES because you know that whatever you choose is possibly the wrong path. Hard decisions are hard because you have competing priorities. Hard decisions that happen often are probably a sign that the system you’re relying on isn’t stable, which means that the thing you did last time might not be the thing you want to do this time.

  EASY ONES because it probably means that you’ve got a habit going. And an unexamined habit can easily become a rut, a trap that leads to digging yourself deeper over time.

• Read this resignation letter by Ariana Pekary from MSNBC. It documents the complete breakdown of our information supply chain due to bad incentives. For media corporations, truth no longer matters. Only popularity does, in the form of ratings and clicks.
   

• I have been writing screenshot-sized posts and book reviews recently. You may find all of them here.
   

• Books: I am reading Scott Young’s Ultralearning, which offers powerful ideas on learning anything deeply and quickly, without teachers or budget-busting tuition costs. Also re-reading Jason Fried’s Rework that shows a better, faster, easier way to succeed in business, and Dale Carnegie’s How to Win Friends and Influence People, which is about changing how the world views and treats you by changing your own behaviour.
   

• Meditation: The meaning of life is just to be alive. It is so plain and so obvious and so simple. And yet, everybody rushes around in a great panic as if it were necessary to achieve something beyond themselves. ~ Alan Watts

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Stay safe.

Regards,
Vishal