Investing is funny, some say it is an art; some say it is science. I am not sure what you say but I realized one thing; as long as I can explain an investment it is science. The moment I am not able to explain my investment but it still makes me money; it is an art. Now art can fetch me returns but not consistently. I had rather use science. One, it is more consistent. second, it can always tell me when I am wrong and hence help me correct it.
I am a fundamental analyst. That means that I look at a company and what it does. I understand how it works and try to imagine what it would look like 5years in the future. What kind of money it can generate and eventually value it on that basis. I would say that I am not an expert but I am not bad. I am pretty decent at judging what companies could look like. However, I still made some mistakes. The most common mistake is timing. Now most probably you get to know about a stock when everyone else knows about it. Hence the stock price has already moved at least a bit. I am late in the game. Hence my returns are low. I may come across a friend who made more money than me on that stock. It makes me feel bad. So am I a bad investor??
I would say "No". No need to feel bad. What matters is how much you made on the whole portfolio. Many times i feel happy that my investment gave me 100% in six months (more often recently) but then I realize that I had invested only 5% of my capital in that stock. So my total return from that stock was just 5%. It is important to know what is the performance of the portfolio. Never feel bad when you hear your friends say they got 2x or 5x return. Ask them what was their total portfolio return.
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