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November 13, 2020 47 min

These are some thoughts about what I wish I had known when I started investing.  I could have paid more attention to these lessons and saved a lot of money.  Because I made some of these mistakes, I am STILL paying for it in my portfolio.  I don’t want you to go through what I went through.

I'd like to give a special shout out to some of my fellow investors out there who contributed their thoughts to this episode:

Harvir - @millenial_mogul_investing
Mabel - @girlsonthemoney (check out our interview in Episode 96)
Teri - @imaninvestor (check out our interview in Episode 91)
Hari and Beko - @valueinvestortv

The 8 mistakes, and their accompanying mental models are:

  • Lack of Basic Financial Literacy (and lack of Mental Models as a general concept)
  • Buying A Stock Because You Like the Product or Service (Endowment Effect)
  • Placing Emphasis on Price, Not Value (Mere Exposure Effect)
  • Placing Emphasis On Recent Stock Performance (Recency Bias, Scarcity)
  • Failing to Recognize Cyclical Businesses and Business Cycles (Dunning-Kruger Effect)
  • Lack of Patience With Capital Allocation (Action Bias)
  • Overestimating or Underestimating a Business’ Competitive Advantage(s) (Mental Model: Confirmation, Mr. Market, Inversion) 
  • Outsourcing Your Thinking To Others (Mental Model: Availability Heuristic, First Principles Thinking)
  • Other episodes mentioned include:
    Episode 4 - The Six Categories of Stocks
    Episode 10 - Mental Model: Inversion
    Episode 15 - Mental Model: Circle of Competence
    Episode 26 - Mental Model: First Principles

    Send me a direct message on Instagram with any comments, suggestions, or just to say hi @stockstoryteller.  Or, you can email me at alex@stockstoriespodcast.com

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