Investing is easy. You deploy your capital with a purpose. But already from here on, things get more complex. What is my goal, and how much time do I want to give my capital to serve its purpose? Stocks, options, gold or bitcoin, the possibilities are numerous, and the internet is loud and full of advice. The time I spend in these bubbles is far too valuable.
Investing can be a hobby and passion
Time is a very limited commodity. As a hedonistic person, time should give me as much pleasure and value as possible. By “value,” I don’t necessarily mean material things. It’s the intangible goods like health, a good conversation with friends, or a home-cooked meal that make me fall asleep happy and satisfied.
Investing, researching, and writing about companies and stocks is also a kind of hobby for me. Maybe it’s even a passion. So the time I invest here is primarily hedonistic. I don’t do it for business reasons.
Nevertheless, all the hedonistic activities are competing with each other. Investing in the way I do (stock picking) is very time-consuming. On evenings when we go to a restaurant with friends or prepare pasta together, I can’t write an article or read an annual report. So it always remains a trade of my time against life’s hedonistic offers.
Investing is easy but things get complicated quickly
Investing is very simple by its very nature. We invest in assets, hoping first and foremost that our capital will increase in value. But there are many side noises that make it complicated.
Many investors want the best possible performance. They want to beat the market and are not satisfied with an average return. This is where it gets problematic because even the historical market return over the last 100 years says nothing about what will happen in the next 10, 20, or 30 years.
So the more rigid and concrete a goal is, the greater the probability of failure along the way. You might want to become president to get responsibility, power, money, and prestige. But achieving all these traits would be much easier if you don’t have to become president as there are many other paths that will lead to the same goal.
That’s why I leave it with a simple approach. I am not in competition with my neighbor or with Mr. Market. I invest in companies because I like being their co-owner. And I invest in myself because I am my own small business and my human capital is my most valuable asset.
Being triggered is torture
So investing is easy, at least when it comes down to the basics, and I know that keeping things easy is exactly what makes it so easy. And yet there are things that trigger me. Financial pornography and clickbait are such examples. Identical YouTube or blog article thumbnails fit in here as well.
I also consider the social finance
world bubble to be dangerous. Here, a partially libertarian view of predatory capitalism is preached. The argumentation goes like this: “We don’t need social systems. Look here, I was able to save and invest a six-figure amount after ten years of working. So anyone can make it.”
But then again, when Wirecard shares go belly up, they scream all the louder for more government regulation and scrutiny to protect the weak retail investors. So, as much as I like to spend my time on the topic of investments and finances, it torments me to read such logical fallacies and short-thought thoughts.
The examples are numerous and varied. What also gets my pulse racing are frugalistas who call people consumer clowns while enjoying their LVMH stock.
For 90 percent of my time, I stay where investing is easy
I, therefore, try to expose myself to these
worlds bubbles as little as possible. It is suitable for my soul, plus I save a lot of time. Time that I can invest in other things. So for 90 percent of my time, I stay where investing is easy.
Yet, of course, this also has its perils. My comfort zone is the densest bubble, and all the stronger are its seductions and aberrations. Accordingly, I must ensure that the shell of this bubble remains perforated. Foreign thoughts, obscene, stupid, and false, must be able to penetrate. Only then do I have the possibility of being surprised and falsified – surely one of the finest achievements.
I only dip my toes into the shark tank
Accordingly, I dip my feet into the shark tank from time to time – which mostly means I read Twitter or meet up for lunch or parties with people I wouldn’t introduce to my friends from childhood.
This training is necessary. I still have a hard time being challenged. I still too often insist on my opinion, even though it is worth nothing, as the gain comes from recognizing one’s error. It’s almost funny. If I were an alien who does not know things like pride, honor, egoism, and overestimation, then it would be the absolute most straightforward thing to accept an opinion or thesis of another person if this thesis is logically more convincing.
But as a human being, the aggressive impulse to counterattack as soon as I hear an opinion that contradicts mine comes still more often than I would like. Fortunately, I have already made a lot of progress here.
Once you understand that falsification is more important than spreading your own opinion, then wanting to teach lectures fades more and more into the background, and wanting to listen and understand becomes more dominant. As I said, it is a question of training.
That’s also why I connect with people I don’t necessarily agree with or even dislike (like they dislike me). These people are not idiots. Instead, getting to know another perspective often makes you realize that another person’s opinion makes sense. I may still disagree. But that is then a question of the different weighting of arguments and no longer a question of right and wrong. A huge progress!