The only thing you can control…

When people start studying stock marketing investing, they’re often worried about understanding every key term and being able to create complex valuation models.

Of course, understanding the terminology of an industry and being able to value a stock before buying it are valuable skills to have.

But, that’s where most people stay.

They continue to focus on these items, instead of focusing on one of the other most important skills of being a successful investor.

It’s said that investing is more an “art” than a “science,” so the valuation models are only going to take you so far.

It is the job, and goal, of the financial news to get you to click on their stuff — articles, videos, or whatever it may be.

The same is said for content posted on social media.

Often times, it is the goal of the poster to catch your attention and get you to engage with their content.

The image below was shared by Morgan Housel on Twitter last week.

This screenshot is of two tweets that were posted within one minute of each other, talking about the same market index.

Neither of these tweets are “wrong” — they are factual information. But does either piece of information matter to you?

Besides being far too short-sighted, it doesn’t provide any positive value to you as an investor.

Too often, investors let the short-term swings in the market determine their mood. They may read the first tweet from Banerji and feel down. Then, they may read Bloomberg’s and feel excited and happy again. Both of these feelings of emotion are wrong. People’s emotions are on a roller coaster — getting far too low on the negative news and far too high on the positive news.

This is the other important skill that investors often miss — controlling your emotions.

Warren Buffett has said, “if you cannot control your emotions, you cannot control your money.”

Because investors are focused on terminology, strategies, and valuation models, they often only read stock investing focused books and forget about the qualitative, emotional side of investing.

There is nothing wrong with studying that material, but there is a point of diminishing marginal returns. You do not gain the same value from the 25th stock investing book you read as you did from the 1st or 2nd. You likely don’t even gain the same value from the 25th stock investing book as you would from reading the right book outside of the stock investing realm.

I’m currently reading the Daily Stoic and parts of it have been perfectly aligned with handling the image above.

I want to share with you a few quotes in particular that are not inherently about stock investing at all, but could dramatically improve your results as an investor if you apply the concepts appropriately.

“[E]uthymia, which he defines as ‘believing in yourself and trusting that you are on the right path, and not being in doubt by following the myriad footpaths of those wandering in every direction.’”

“If we can focus on making clear what parts of our day are within our control and what parts are not, we will not only be happier, we will have a distinct advantage over other people who fail to realize they are fighting an unwinnable battle.”

You are fighting an unwinnable battle if you let financial news headlines and market movements control your emotions. Control what you can control — your emotions.

I will end this newsletter with one final quote:

“One of the most powerful things you can do as a human being in our hyperconnected, 24/7 media world is say: ‘I don’t know.’ Or, more provocatively: ‘I don’t care.'”

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