Your emotions are killing your investment returns

Portfolio Value: $114,366. All-Time Performance: -$18,728

November 19, 2022

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This week was about what I expected. We lost $6,819 and gave back some of last week’s gains. Oh well. That’s how investing works.

This tweet from my friend (go subscribe!!) describes what is called “The Behavior Gap” which is the difference between investment returns and investor returns. Carl Richard’s book The Behavior Gap is a must read imo.

From the Book: “It’s clear that buying even an average mutual fund and holding on to it for a long time has been a pretty decent strategy. But real people don’t invest that way. We trade. We watch CNBC and listen to Jim Cramer yell. We buy what’s up and sell what’s down. In other words, we do exactly what we all know we shouldn’t do.”

When you see the S&P 500 up 9.5% per year, you’d think that’s the return investors get. But it’s not. On average, investors have returned 3.6% in stocks vs the 9.5% average for the market because they constantly trade in and out based on their feelings/emotions.

That behavior chips away at your performance which really adds up over time.

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Portfolio Update

Start Date: February 15, 2022Contributions: $132,604Current Value: $114,366All-time performance: -$18,728Last week’s performance: -$6,819Transactions last week: 0Current Industry Allocations:25% EV, Space, & Advanced Manufacturing TSLA -2.73%↓ RKLB -0.85%↓ TSM -0.22%↓19% AdvertisingMETA -1.18%↓ 18% Cloud Services & SecurityNET -5.83%↓ DDOG -5.75%↓ CRWD -4.77%↓ 15% eCommerceSHOP -4.44%↓ MELI 1.58%↑ 13% Data Cloud & Database Platform SNOW -3.57%↓ MDB -4.97%↓ 5% DevOpsGTLB -5.70%↓ 5% SMB Finance OperationsBILL -4.90%↓ Position Sizes & Total Return:

Portfolio Company News:

Current Portfolio Multiples, Forward Revenue Growth, and Profitability metrics

Upcoming Earnings

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DISCLAIMER

I am not a Financial Advisor and nothing I share should be taken as financial advice. This newsletter is for informational purposes only. Investing is inherently risky and the risks could include complete loss of invested capital and/or more if someone uses margin. Austin Lieberman is not liable or responsible for any financial loss incurred by anyone. The views shared here are my own.

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