Great self reflection. Your articulation of the type of FOMO you feel is very smart.
The only part that surprised me a bit in your logic was about building positions in payments, while feeling concern the up trend won't last and acknowledging the last few years my not look as the nest few. We don't know the future - but sleeping well at night is important too. You might want to consider diversification towards market sectors that are less correlated with tech growth and payments (e.g energy, defense, Industry). It Depends on you circle of competence of course - but it seems you don't shy away from learning and deep research. Investing in growing the circle of competence is also a good time investment if you take a break from trading, as you mentioned.
1) I'm very careful of staying inside my circle of competence which sadly doesn't really include energy or defense. I've invested in both in the past and learned that I'm just not enough in the weeds of either industry to be qualified to allocate capital here. I could take some time to learn and brush up and happy if you have any specific recommendations on a particular resource.
In terms of diversification I use cash as a large outlier position and recognize that not all tech is created equal (even though much of tech is considered a long duration risk asset and sensitive to interest rates).
2) Re payments specifically, overall it's a small position, even taking all positions put together and I feel pretty comfortable based on my knowledge of the industry, the synergetic benefit from doing homework on multiple names and mainly the secular tailwind they're all enjoying.
Re investing in defense or energy - i'm much less careful than you are, and usually realize i wasn't qualified to allocate capital only after the fact. It's does help to gain life lessons fast though. I'm not aware of resources - but my advice is to focus on small business with focused operations and small set of products you can easily understand and follow along - vs trying to start with studying the market leaders. Trying to understand the intricacies of an oil super-major that does up/mid/down stream is as pointless as trying to understand the dynamics of a typical growth tech company by analyzing Google or Microsoft. Navitas petroleum is a good example of an oil exploration business that has a thing going right now - and i found their decks and conferences very enlightening and educational.
Re diversification - I usually have low/no cash. It helps me with the fomo ("my money is not working for me!!"). I like the idea that when the tide is overall strong all my funds are yielding profits, and when it's bad, some of it still does. For example, business in defense is booming right now thanks to secular trends of europe re-arming, and business in energy is generally good thanks to the forecasts of AI driving greater demand in coming years. However, even if some crazy war starts and major conflict somewhere and global trade and growth forcast take a hit - i like the fact these business would still shine. Some black swans drown all sectors (e.g covid), but some you can protect yourself from by diversifying this way, without letting your capital rot in the basement.
Anyways, these are my trivial thoughts on the matter. great blog! looking forward to updates.
Great self reflection. Your articulation of the type of FOMO you feel is very smart.
The only part that surprised me a bit in your logic was about building positions in payments, while feeling concern the up trend won't last and acknowledging the last few years my not look as the nest few. We don't know the future - but sleeping well at night is important too. You might want to consider diversification towards market sectors that are less correlated with tech growth and payments (e.g energy, defense, Industry). It Depends on you circle of competence of course - but it seems you don't shy away from learning and deep research. Investing in growing the circle of competence is also a good time investment if you take a break from trading, as you mentioned.
Thanks and good thoughts -
1) I'm very careful of staying inside my circle of competence which sadly doesn't really include energy or defense. I've invested in both in the past and learned that I'm just not enough in the weeds of either industry to be qualified to allocate capital here. I could take some time to learn and brush up and happy if you have any specific recommendations on a particular resource.
In terms of diversification I use cash as a large outlier position and recognize that not all tech is created equal (even though much of tech is considered a long duration risk asset and sensitive to interest rates).
2) Re payments specifically, overall it's a small position, even taking all positions put together and I feel pretty comfortable based on my knowledge of the industry, the synergetic benefit from doing homework on multiple names and mainly the secular tailwind they're all enjoying.
Re investing in defense or energy - i'm much less careful than you are, and usually realize i wasn't qualified to allocate capital only after the fact. It's does help to gain life lessons fast though. I'm not aware of resources - but my advice is to focus on small business with focused operations and small set of products you can easily understand and follow along - vs trying to start with studying the market leaders. Trying to understand the intricacies of an oil super-major that does up/mid/down stream is as pointless as trying to understand the dynamics of a typical growth tech company by analyzing Google or Microsoft. Navitas petroleum is a good example of an oil exploration business that has a thing going right now - and i found their decks and conferences very enlightening and educational.
Re diversification - I usually have low/no cash. It helps me with the fomo ("my money is not working for me!!"). I like the idea that when the tide is overall strong all my funds are yielding profits, and when it's bad, some of it still does. For example, business in defense is booming right now thanks to secular trends of europe re-arming, and business in energy is generally good thanks to the forecasts of AI driving greater demand in coming years. However, even if some crazy war starts and major conflict somewhere and global trade and growth forcast take a hit - i like the fact these business would still shine. Some black swans drown all sectors (e.g covid), but some you can protect yourself from by diversifying this way, without letting your capital rot in the basement.
Anyways, these are my trivial thoughts on the matter. great blog! looking forward to updates.
Excellent writing!
Thank you very much. There are definitely a lot of important points to think about.