8 Mistakes of Beginner Investors - What I Wish I Knew When I Started Investing

These are some thoughts about what I wish I had known when I started investing.  I could have paid more attention to these lessons and saved a lot of money.  Because I made some of these mistakes, I am STILL paying for it in my portfolio.  I don’t want you to go through what I went through.

I'd like to give a special shout out to some of my fellow investors out there who contributed their thoughts to this episode:

Harvir - @millenial_mogul_investing
Mabel - @girlsonthemoney (check out our interview in Episode 96)
Teri - @imaninvestor (check out our interview in Episode 91)
Hari and Beko - @valueinvestortv

The 8 mistakes, and their accompanying mental models are:

1. Lack of Basic Financial Literacy (and lack of Mental Models as a general concept)
2. Buying A Stock Because You Like the Product or Service (Endowment Effect)
3. Placing Emphasis on Price, Not Value (Mere Exposure Effect)
4. Placing Emphasis On Recent Stock Performance (Recency Bias, Scarcity)
5. Failing to Recognize Cyclical Businesses and Business Cycles (Dunning-Kruger Effect)
6. Lack of Patience With Capital Allocation (Action Bias)
7. Overestimating or Underestimating a Business’ Competitive Advantage(s) (Mental Model: Confirmation, Mr. Market, Inversion) 
8. Outsourcing Your Thinking To Others (Mental Model: Availability Heuristic, First Principles Thinking)

Other episodes mentioned include:
Episode 4 - The Six Categories of Stocks
Episode 10 - Mental Model: Inversion
Episode 15 - Mental Model: Circle of Competence
Episode 26 - Mental Model: First Principles

Send me a direct message on Instagram with any comments, suggestions, or just to say hi @stockstoryteller.  Or, you can email me at alex@stockstoriespodcast.com

Email: alex@stockstoriespodcast.com

Chapters

• 0:53 Intro
• 5:02 Lack of Financial Literacy
• 10:42 Buying A Stock Because You Like The Product Or Service
• 14:42 Placing Emphasis On Price, Not Value
• 18:48 Placing Emphasis On Recent Stock Performance
• 23:15 Failing To Recognize Business Cycles
• 27:07 Lack Of Patience With Capital Allocation
• 30:05 Overestimating Or Underestimating A Business’ Competitive Advantage(s)
• 37:31 Outsourcing Your Thinking To Others
• 42:00 General Themes And Closing Comments