A commonality amongst those just getting started on their investing journey is picking up a book from a storied investor. I know that’s how it began for me, and I believe it is true for many. My foray into investing came in the form of Snowball by Alice Schroeder. While not a conventional ‘Investing’ book it documents the life and times of Warren Buffet who could be referred to as THE household name in the world of investing. I started here and stumbled my way through The Intelligent Investor, Dhandho Investor, Zero to One, and a few other more technical textbook style reads.
Put simply you could read forever ON investing, but to get around to the business of doing it can be that much more intimidating for many. On top of that, the more you read seems to have the initially inverse effect of making you feel like you know less. Which eventually turns out to be a good thing (knowing what you don’t know), but I could see myself being inspired to write just on that at in the future so more on that later.
It’s well documented that many investors will place “small bets” on markets, industries, stocks, etc to get a ‘feel’ for the investment. It can be used as a way to inspire a more critical eye, and potentially uncover a truth or falsehood about a given hunch. It can be a good trick for creating a little emotional contract with yourself to force further research and work on a given investment. Not everyone does this, but after reading and digesting all of that investing information I found it to be a good way to go from theory to practice. It’s prudent to have these bets be true to name, and keep them small. Whatever you think small is, cut that in half. Even a couple shares of a public company should be enough to get you interested. And this brings me to another point as I think about getting started in investing, everything is relative.
Investing is a competitive game. The sooner that you digest that and accept it, the better off you will be. Whether it’s alternatives (private companies, real estate, etc), equities, or bonds you will have people that you consider peers that you will subconsciously compare yourself to constantly. Additionally, you will read things that investors are doing (like placing ‘small’ bets to get to know a market), never blindly follow anyone or anything they’re doing. Using the small bets example, small for Warren Buffet is 1bn. I assume that small for you is not 1bn, if not, I expect some notes from you because I would greatly appreciate them. This will be a helpful truth to always keep in mind when reading, listening to, or learning about another investor(s) in anyway.