This is going to be a short post. More as a reflection, than any insight about investing.
I recently met my uncle and aunt as part of some family function a few months ago – they had met me after 20 years. The way they were talking to me – it almost felt like they were treating and talking to me like a young kid just out of grad school – it was endearing as well as frustrating at the same time. I am 39 (going on 40) having grown (de-grown?) in worldly experience, and they were pulling my leg as if I was still that bumbling 20 years old.
A very similar thing happened when I met my first boss / mentor a month ago (who had a phenomenal influence on the way I work today) after 15 long years. It almost felt as if I had never left – the way he spoke, the way he bought lunch for me, the way he treated me – he still saw me as that young analyst who, on his first day at the job thought he knew everything, but didn’t know shit in reality.
I am not sure if any of you felt the same way, but this episode repeats across a wide variety of scenarios. You meet people after a long time, and they cannot really place you for the person you have become – good, bad or ugly – but can only relate to what you were when they last saw you. It’s kind of a photograph-in-time feeling and they have a very very hard time seeing beyond that.
I was recently looking at a stock that I had sold off 7 years ago. Of course, like all good investors, I also claim that I read ARs every year of all businesses I bought/sold previously – but let’s reserve such utterances for public appearances. I didn’t know what happened to this business post I sold (other than broad numbers which is easier, thanks to screener). Here is a business that I knew previously and I thought it’s a short jump from there to understanding the business in entirety in a day or two. As I kept reading ARs one after another, I had a very very hard time reconciling what I knew about the business before, and how it has taken steps – good and bad – to become the business it is right now. It was just insanely difficult to put on a fresh pair of eyes, with fresh thinking and treat it as a completely new business that I didn’t know and learn – I was still being prejudiced putting business steps in stupid buckets that I knew from before.
“Investing is 90% psychology, 10% intellect” etc., is all psycho-babble because anything and everything that you do in investing/trading can be attributed to psychology while investing is predominantly predicated on odds and luck. However, the issue with investing (and life in general), is that what you think you know is not really what exists in reality – whether it be your kids, someone else’s kids, or the stocks you bought/sold in the past – need a really fresh pair of eyes and thinking for a reality check.