Tscm_1The latest "Apprenticed Investor" column is up: Write This Down.

This week, we look at a question that plagues investors:  "How did all these losers end up in my porfolio, and what was I thinking at the time? 

We also discuss the ways investors can keep track of their thought process of their prior stock purchases. The goal is to figure out what went right — and wrong — and improve your purchase process.

Here’s the excerpt:

"What the hell was I thinking when I bought that pig?"

How many times have you asked yourself that question? Don’t worry, you’re not alone. It’s an all-too-common lament among individual investors, whose portfolios are often littered with these losers. Almost as bad as the financial hit is the nagging related question, "How could I have ever been so stupid?"

Today, we address that issue. Included in our discussion are two basic tools that will help you look back and understand your own thought process, and the analytical steps you took — or failed to take — before buying that sow. More importantly, this process can help before you buy the next pig.

Developing a way to both evaluate and improve your performance is one of the most important skills any investor can have. Yet far too few individuals have a mechanism by which they can review their stock picks, evaluate their trade management and assess their market calls.


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Source:

Apprenticed Investor: Write This Down
RealMoney.com, 10/10/2005 7:34 AM EDT

http://www.thestreet.com/_rms/comment/barryritholtz/10246290.html

Category: Investing

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “Apprenticed Investor: Write This Down”

  1. Brandon says:

    Barry, I remember in an earlier column you mentioned you were going to discuss stop-loss techniques. I’d be really interested to hear some of your thoughts on setting stop-loss and trailing stop points.

  2. Bruno D. says:

    Thanks for sharing that Barry! I’ve took a look at the article and the excel and word documents your provided as examples. It’s nice because you took that extra step and posted some concrete examples for us!

    I have been building something similar, my philosophy was to have everything in one document, an excel sheet, where I list my trades, measure my results, and also put some details on each transaction.

    In the end, I think information management & tracking is one key skill successful traders must learn, along with the discipline of sticking to their routine once they have it figured out.

    Along the lines of your article, one key tool I found which helps my research a whole lot (and mostly to remember what I’ve read on the VERY volatile www) is Net Snippets. It’s a plugin that can be used with browsers to save parts (snippets) from web pages you visit. The main difference with saving the entire pages is mostly convenience, it is so simple to use, you can even highlight (like yellow marker) some text that you save from pages and generate reports afterwards to read what you saved in one page. It didnt seem to gather much attention yet, but I find it as essential as a yellow marker when reading / studying a technical book, I like to highlight parts and take notes, why not for the internet? Check it out if you have a minute:

    http://netsnippets.com/