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Long-Term Mindset

🧠 The Key to Successful Investing

Published 4 months agoΒ β€’Β 3 min read

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Friends,

Jim Grant once said the key to successful investing is "having everyone else agree with you....later.”

That sounds good, in theory. But it's maddeningly frustrating to execute in practice.

That's because the "later" part is crucial. If everyone agrees with what you're investing in right now, you're buying at bubble prices. As investors learned in 2021, that doesn't end well.

The reverse is also true. If you like a stock that no one else does, you'll be buying at a cheap valuation. That sets you up to earn strong returns once the market recognizes that value.

Here's the hard part: it can sometimes take years for the market to agree with you. Once it does, it'll bid up the share price, and your patience will be rewarded. But waiting for that to happen can be extremely challenging.

Over a decade ago, Stoffel took a big position in Activision Blizzard. The business was growing, cash flows were improving, and its moat was widening. Stoffel saw an opportunity, but the market didn't agree. That made the valuation compelling.

Time proved that Stoffel's thesis was correct. Activision Blizzard's stock eventually soared more than 1,000% from his initial purchase price, and the business recieved a buyout offer from Microsoft.

But here's the rub: Stoffel didn't participate in the gains. While he held it for several years, he sold out just before the stock started to rally.

Why did he sell? Because Activision Blizzard's stock did nothing for years! The market was telling Stoffel that he was wrong the entire time he held. As a novice investor, he hadn't yet developed the confidence in his skills to maintain conviction in the face of a go-nowhere stock. Eventually, the market's voice drowned out his own and he capitulated.

What Stoffel badly needed during that time was a supportive community. Stoffel would have benefited hugely from a trusted third party to battle-test his thesis and provide helpful feedback. If he had that, he would have been able to maintain the conviction to hold. Connecting with a group of like-minded investors would have helped him tremendously.

This is all too common in investing. Investing is a lonely endeavor. Learning, researching, analyzing, monitoring...all these activities are usually performed solo.

This is why connecting with a tribe of like-minded investors is so powerful. Everyone wins when ideas are shared and stress-tested. Everyone gets stronger when they share their own experiences, no matter where their opinion might fall on a particular investment.

A community of thoughtful, curious investors is worth its weight in gold.

That's precisely why we've built a private community of investing enthusiasts in secret. Our course alumni told us they hugely enjoyed connecting with other investors. They asked us if there was a way to keep the relationships going after our live courses ended.

That nudge convinced us to launch a private community earlier this year. We've been extremely pleased with the results. Thus far, it's only been available to students who have taken our live courses this year. Now that it has momentum, we plan on opening it up to readers of our newsletter for the first time. (If you're interested in learning more, click here to get on the waitlist to be notified as we release details.)

Taking the time to build relationships with like-minded peers is time extremely well spent. Thankfully, it's never been easier to do so. If you dig hard enough, you can find excellent investing piers on nearly every social platform (our favorites are Twitter, LinkedIn, and YouTube).

Wishing you investing success,

- Brian Feroldi, Brian Stoffel, & Brian Withers


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.

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One Simple Graphic:


One Piece of Timeless Content:

Nick Maggulli highlights the four types of leverage you can use to supercharge your income. It is also helpful to understand how companies leverage resources to grow and expand profitably.


One Thread:

13-F season is just around the corner. This thread breaks down the top fund managers that are worth studying:

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One Resource:

Looking for details on a company's acquisition history, funding sources, or IPO? Crunchbase.com is our go-to resource for a company's M&A data and information on outside investments and secondary offerings.


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More From Us:

πŸ‘¨β€πŸŽ“ NEW! Want to learn the basics of accounting? Click here to enroll in a 5-day email course that covers the three financial statements in detail. It's completely free.

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

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

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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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