The Motley Fool

Searching For A Fellow Value Investor? Be Patient

The title of this article may seem weird, but it is something which has been bugging me for a few years now. So, I thought I would articulate the issue here for others to understand it better.

In investing, no man is an island and everyone would seek social proof and validation to some extent. Very few investors are able to completely shut the world out and stay solitary – humans generally require a certain level of social interaction and networking to function normally. Moreover, one way to obtain good investment ideas and suggestions is to talk to other knowledgeable and skilled investors. However, I realized over time that the search for other investors can be arduous and time-consuming, and that the key is to be patient.

A kindred spirit

It took me some time to be able to find a kindred spirit as the majority of investors I met either did not share the same time-horizon as myself (they are short-term, I am long-term), did not believe in owning companies (they look at stocks as inventory, not assets) or were more focused on share price movements rather than business performances.

The search for investors with a similar mindset as mine went on and over time, I managed to gather a small group of friends who shared the same ideology and philosophy as I did. Investors out there should also spend time and effort in locating others who share their investment style and philosophy.

Sharing Of ideas and mistakes

The sharing of ideas and mistakes among a group of investors with a similar mindset can accelerate our learning and enable us to quickly move up the learning curve.

If we ply our craft alone, there is a limited number of companies we can cover without running out of time and energy. By leveraging on a group with similar philosophies, much more companies can be covered and mistakes can also be pointed out and shared, resulting in a better learning process. We can also avoid confirmation bias in the process.

Social validation

The final reason for looking for folks with a similar investing bent is also for social validation, though admittedly, there is a dark side to it. As human beings, we want to be able to obtain validation for what we are doing, and a group of like-minded investors can provide this positive feedback. The counter-point to this is that we may suffer from groupthink and be unable to obtain constructive criticism of our ideas, since the group may have similar ideas and philosophies. This is why it is good to be our own critic when it comes to reviewing investment ideas.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.