Letters to a Young Investor

By bmvtyea | Bernie-flow | 24 Sep 2021


Most major investors, current and historical, follow some guiding principles. These are investment strategies and philosophies that enable them to have the path to follow in order to achieve their goals.


Many may ask: do I have what it takes to be a good trader?

This is an extremely valid question and the answer is ambiguous.


Many believe that to be a good investor you need to know about major economic issues, accounting details, financial technicalities and sophisticated mathematical tools. None of that. The main traits that define a good investor are much more subjective, intimate and emotional.


The technical questions everyone can learn, with more or less effort. However, the abilities to understand other people, to keep a cool head in times of stress and uncertainty, to go against the grain of most other investors, these are for few.


First, the investor must be curious. He needs to have a genuine interest in learning new things and be willing to have his perception of reality altered as new evidence emerges. Investors mainly want to be able to understand how the real world works and, based on that observation, make the best decisions.




When faced with an idea contrary to yours, you need to be open to understand the other point of view and change your mind if necessary, even if it means giving up one of your most cherished ideas.


Charlie Munger once said that a year in which he didn't have one of his fundamental ideas destroyed was a lost year. This is because if the investor believes in a perception of reality and makes his decisions based on it, this will have material consequences for his investments. However, if this perception proves to be different from reality, he needs to be thankful for not continuing to believe in the old idea, even if this reality is not ideal.


Changing your mind to be closer to understanding how the world works is more beneficial than continuing to believe in a fantasy reality that seems friendly. In addition, it is necessary that the investor has experience. Thus, the longer the practice, the better prepared he will be to analyze investments.


The good investor needs to know that volatility movements in the crypto market are common, as well as know how to react to them – or how not to react. In this process, the habit of reading is fundamental. Books are excellent sources for acquiring this knowledge, especially those that bring stories from the past.


Furthermore, in order to make good investment decisions, it is necessary to know, with some level of detail, the crypto in which you are a partner, which is a way of not making the wrong decisions at the wrong times. Thus, the more in-depth the analysis, the better the investment thesis carried out by the investor.


All these issues need a certain amount of practical experience to be understood. These are nuances that are learned from experience, from everyday life, always confronting your ideas with the real world. Or even through reading which, as said, is fundamental in the process of intellectual development. Thus, the good investor needs to have a genuine interest in people and crypto, accept the real world as it is, and have no problem changing his mind.

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Young Brazilian newbie in Crypto


Trying to inspire those who doesn't have some financial conditions, such as myself, to growth a nice portfolio.

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