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The Investing Mistake That Isn't Actually a Mistake
Published about 2 months ago • 3 min read
Here's your weekly helping of interesting investing information and insights.
Opinion
Have you ever sold a stock for all the right reasons and then watched it just... keep going up? I have. Once or twenty-two times.
Here's something worth thinking about — and this goes for life as much as investing: stop beating yourself up for not knowing the future. Because you couldn't have known. When I sold Lockheed Martin (LMT) and Nexstar Media (NXST), I didn't know about the geopolitical drama or the merger coming down the pike. Nobody did. Mentally beating yourself yourself with information you didn't have yet isn't reflection — it's just torture.
There's actually a name for this trap. Annie Duke calls it "resulting" in Thinking in Bets — judging a past decision based on what happened after, instead of what you knew at the time. The future is genuinely unknown and unknowable. It's said there are only two types of people: those who know they don't know the future, and those who don't know that they don't know. That's why I run a "core and explore" portfolio — 85% low-cost index funds, 15% individual stocks — because the most important variable in investing is the one nobody has access to... the future.
Think about it this way: if someone drove drunk and made it home safely, they still made a terrible decision — the outcome doesn't change that. Same logic applies here, just in reverse. A good decision with a bad outcome is still a good decision. So stop beating yourself up for not predicting the unpredictable — and I'll try to do the same.
What I'm Reading
Berkshire Hathaway's (BRK.B) new CEO Greg Abel just sent his first letter to shareholders — and his message was simple: same playbook, bigger cash pile, and still no dividends! [Link to article]
Quote I'm Thinking About
"We are trying to prove ourselves wrong as quickly as possible, because only in that way we can find progress." —Richard Feynman
Is it just me that enjoys Jack Hough's dry sense of humor? Let me know, and oh yeah, he also talked about the "anything but A.I. great rotation" that looks to be taking shape. Always a fun podcast listen!
Disclaimer: This is not investment advice. Do your own research before making any investment decisions.
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Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
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