The Amateur Investor Ep.7: Wild Times

Since the last issue, things have taken an admittedly insane turn. We’ve seen a number of high profile protests occur in response to systemic racism and police brutality in the United States, with many states declaring curfews and martial law. I have my own thoughts on the whole matter, but being that everyone with a pulse is voicing their opinion, I’m not sure it would help anyone to add to the cacophony of opinions. 

I can’t really comment on what the stocks have done in relation to the crises either since I’m still trying to develop a protocol for monitoring how currency events affect the market. At a guess I’d say the American market isn’t doing too well, what with businesses being looted and burned during the rioting. On the Australian end, I woke up a few days ago and checked my portfolio only to realise that for the first time in about 2 weeks, some of my long-hold positions were starting to improve. Admittedly, in the early days of the COVID-19 pandemic, I had been quite lucky, thanks to some good advice and better timing, I was able to buy in just before the bottom. As I mentioned in the last issue, I had the unenviable privilege watching many of my investment positions fall the however many more percentage points down the ladder, all the while praying that the bottom would come soon and things would improve. 

During the last week, I sat down and made a list of the things I would need to actually start investing with confidence since up until relatively recently, I’d been buying most of my positions not based on valuations, but solely based on an understanding that the companies would eventually come back up. For the sake of less-hand-wavy knowledge, I started tinkering with an actual investment thesis, and it’s still a work in progress, coming together in bits and pieces. It’s a lot like building a car from scratch, a tonne of research followed by a tonne more of hunch-following. Once you figure that out, the trick comes with applying that thesis, looking at either companies that fall under that thesis or ETFs to hedge your bets. Right now all I’m doing is fine tuning the details of it, figuring out if any of parts of the thesis hold water.

I did note recently that my portfolio seems to have bounced somewhat, with a number of my long-hold positions making steady value increases daily, which is nice to see. I’m not looking to get into any new positions as yet, instead I’m sitting on my positions and taking time to refine my valuation process and overall understanding of how the market works. 

Now, more than ever, play small, go slow, learn the process.