In the last 2 emails, I made the case that making Hard Decisions required a focus on process instead of facts. I gave the example of driving to illustrate a point. But I felt it would be best to go more in-depth about the decision-making process that plagues a large majority of High Performers: What should I do about my investments?
Professional traders and investors refine their investment process to the point where it provides consistently profitable results. When they get good, they figure out a way to scale up that process so they can take on more capital. Ray Dalio did this with an automated system for predicting commodity prices. Warren Buffet is a big proponent of his extreme valuation style of investing.
What’s strange is that non-professional traders and investors don’t seem to focus on process with the same diligence as professional traders. Why not? Are non-professional traders and investors too good for that? If so, how are their results?
We have a tendency to believe that more facts will keep us safe because it eliminates uncertainty unless taught otherwise. This is instinctual. Therefore, facts sell better than process when it comes to educational material on trading and investing. Bitcoin is going up! Facts. Buy Real Estate now! Facts. The Bubble is going to Burst! Facts. Would you want to learn more about those statements? Certainly. How about Understand your reality by testing your theories through a structured process. Interested in reading that article? How about implementing it?
Even if you read that article, it would probably be the only article you need. It’s easier to sell 10 articles on the price movement of Bitcoin, Stocks, Commodities, Real Estate than it is to sell one article on how to create an appropriate investment process. But here it is:
As you can imagine, this process can be applied to things outside of just Investment. But it’s the basic outline necessary for you to understand who you are, what you want to do, and how to get there. It applies whether you want to do long-term buy and hold investing to short-term day-trading to real estate flipping to leveraged buyouts. These are fundamental criteria to ensure a successful outcome.
“But Dr. Eric…I thought you were going to give me an investment process to make insane gains!!! You suck.”
Yes. I suck.