Friends,
I (Stoffel, here) have been running our Stock Investing Mentor service for two years. It's been fun, and our members have learned a lot about investing -- and themselves -- in the process.
But one part has been particularly stressful lately: my real-life portfolio -- which is open for all members to see -- has had a rough run.
While it is still handily beating the S&P 500 since I started tracking in December 2014, it has underperformed the broader market by over 30 percentage points since last October.
Below is an excerpt of what I wrote to members about that this past weekend:
"Iβm a big proponent of skin in the game. But let me tell you something: it really sucks.
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Running this service would be so much safer β psychologically and emotionally β if I focused on sharing the lessons Iβve learned over the years, teaching how to interpret financial statements, ad cherry-picking my best decisions to highlight my lessons along the way.
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But sharing every detail of my real-life portfolio changes things. It means that I canβt rest on my laurels. It means that Iβm just as exposed to the scary, rapidly-shifting landscape of the world around us as everyone else. And it means that β especially during rough patches β it can be very easy to feel like an imposter.
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The beauty of keeping oneβs skin in the game is that it forces us to adapt. How does it force us to adapt? Through pain.
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Pain has a very important evolutionary trait: it teaches you when you need to change something.
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I remember reading stories as a kid about leprosy β at the time, presented to me as a disease where oneβs body parts slowly fall off. It was only later that I found out the truth: leprosy comes about through nerve damage that makes it impossible for those inflicted to βfeel the gift of pain.β
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That might sounds like a super-power β but over time, itβs fatal. If you donβt feel pain, you hold a hot kettle for too long, push through injuries, and are generally unable to tend to the problems that crop up from normal life becauseβ¦youβre completely unaware of them."
Whether it's in investing or other areas of life, we're all always looking for role models. It can be really easy to look for teachers, mentors, and guides who have a history of success and stop there.
But two things are worth mentioning: first, there's no guide with a perfect track record. And if someone claims to, that should be a warning sign.
Second, you want to make sure that the guide you're listening to still has skin in the game. I'll never argue that I'm a perfect investor. But since 90% of my family's net worth is tied up in the portfolio I publish, you'd better believe that I have every ounce of motivation to adapt and evolve as the world we live in changes.
Over the long run, however much it sucks, that "gift of pain" is often the nudge we need to continue our process of evolution.
Wishing you investing success,
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Brian Feroldi, Brian Stoffel, & Brian Withers
Long-Term Mindset
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