Long-Term Mindset

🧠 Are You Making This Investing Mistake?

Published 4 months agoΒ β€’Β 3 min read

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One of the best ways to become a better investor is to study topics that have nothing to do with investing. If you find themes that apply in multiple disciplines, you've found a "cheat code" to use in all areas of your life.

Take parenting as an example. Two years ago, Dr. Michaeleen Doucleff published the best-selling Hunt, Gather, Parent. Doucleff is an NPR reporter and researcher who was fed up with her own "failings" as a parent to a two-year-old daughter. She was also concerned with the trends for girls in America -- higher rates of anxiety, depression, and suicide.

Her job brought her to remote parts of Africa, Central America, and the Arctic. While there, she noticed the children had none of the problems she -- and so many others -- have grown used to. So, she took time off to investigate the phenomenon further.

Some of the book's lessons are obvious: you need to model the behavior you want your kids to adopt and give plenty of practice developing those habits.

But some lessons run counter to what you might expect. Namely, don't interfere unless there's grave danger. That includes letting kids argue, suffer scrapes and bruises, never scolding, and even stopping the habit of (gasp!) praising.

In essence, parents were responsible for creating a supportive environment and then getting the heck out of the way.

We think this same lesson applies to investing.

We aim to fill our portfolios with mission-driven companies with a wide moat, optionality, financial fortitude, and a massive opportunity, all at a reasonable valuation. If we consistently do that well, we believe we are positioning ourselves for substantial long-term success.

Anything beyond that core activity -- be it trading, market timing, or trying to speed up the process with financial leverage --is akin to excessive parenting. Sure, those activities might make us feel like we are doing something useful in the moment. In reality, we're causing ourselves unnecessary harm.

Once your portfolio has been set up properly, stop fiddling with it: get the heck out of the way!

But, like parenting well, that's easy to say but damn hard to do.

Wishing you investing success,

- Brian Feroldi, Brian Stoffel, & Brian Withers

P.S. We've secretly been operating a premium investing community for the last year. In the next few weeks, we'll be opening it up to our newsletter readers for the first time. Interested in learning more? Click here to get on the waitlist to be notified as we release details.

Together with CNBC Pro​

We recently gained access to CNBC Pro. If you're an investor, there's a lot to like about this site.

CNBC Pro enables users to access ad-free, full-length interviews with guests that only CNBC can access, such as Warren Buffett, Bob Iger, Ken Griffin, and Ron Barron. It also offers live monthly 'Pro Talks', hour-long discussions with big-name money managers. Past guests include Cathie Wood & Thomas Russo. Bill Ackman will be a guest in the near future.

CNBC Pro also features a growing library of ad-free videos, up-to-date insights from professional analysts, breaking news, trending tickers, analyst upgrades & downgrades, and insights into the big macro.

Take a tour of CNBC Pro's full features by clicking here.


One Simple Graphic:

One Piece of Timeless Content:

Warren Buffett loves high-moat companies with excellent returns on invested capital. This article explains the three categories the Oracle of Omaha uses to classify businesses based on moat and ROIC.

One Thread:

We all love investing, but we all firmly believe that getting your personal finances in order is the first step to building lasting wealth. This thread by Stoffel explains the step-by-step process he uses to make his financial life antifragile.

One Resource:

The investing world is filled with fancy words, complex calculations, industry jargon, and acronyms. Whenever we encounter a term we don't know, our first stop is Investopedia. This wonderful site is filled with detailed articles explaining just about any concept related to investing.

One Quote:

More From Us:

πŸ‘¨β€πŸŽ“ NEW! The next cohort of our flagship course, Financial Statement Explained Simply, is starting in January 2024! Click here to join the waitlist.

πŸ“— If you've read Brian Feroldi's book, he'd love a review.

πŸ‘¨β€πŸŽ“ Need help getting your personal finances in order? Click here to start​ our 5-day Financial Wellness email course. It's completely free.

Long-Term Mindset

by Brian Feroldi

I teach you how to invest with a long-term mindset. Each Wednesday, I share six pieces of timeless content that can be read in less than 2 minutes. Read by 100,000+ investors from a16z, Amazon, Google, Microsoft, and more.

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