I am a big believer in continuous learning. As an investor, that is the only sustainable edge over the long run. To beat the market, you have to put in the work. There is no seniority in the market where you can coast along based on your past laurels
Learning for the beginner
For beginners it’s much easier – Books. Pick up a few books on accounting, business, finance etc and learn the basics. For someone diligent, this would take a year or two on average
Don’t worry about finding the best books on these topics. Just google the top 5 books in each area and start reading. If you have a question on some topic, get a cheap subscription to Chatgpt or some other LLM and work with it. Ask those questions to the LLM – It is a wonderful tutor on any topic
Learning for the novice
Once you know the basics, don’t look for a magic course or a silver bullet to make you proficient in the market. You will find a lot of courses which promise to make you the next Buffett or expert trader with very little effort. They are all scams
If you must use a course, it should be to learn the basics and even there, most courses are mainly a condensed version of books. So, use these courses to speed up the learning process
Once you are past the basics, the best option is to dive in. Based on your preferred approach, start analyzing companies. Make a lot of notes as you filter ideas and deploy money in them. Keep in mind that you will make mistakes in the beginning.
Start small so that you can keep the tuition fee low
At this stage, seek out mentors. If you find someone who is willing to take you under their wings, you have hit the jackpot. Do the best to learn from your mentor, but at the same time be critical enough not to take everything your mentor tells you as the absolute truth
I have had a lot of mentors from whom I have learnt but have never spoken to them. In my case, it has been by reading and re-reading what they have written. It’s amazing how much you can get just by doing that
This stage can last years but as you keep doing it, you will progress in your understanding of how to invest and will improve your returns
Learning for the expert
In a few years, you will start feeling like an expert. If it coincides with a bull market, you will even feel like a genius. You will start entertaining ideas of quitting the market and becoming a full time investor. At this stage you will proudly display your results on social media
And then the bear market will hit and wipe a good chunk of your gains
That’s when you will realize that there are no gurus or gods in the market. Everyone is learning and figuring it out every day.
If you accept that continuous learning is the only way to keep doing well in the market, then this stage is both exciting and problematic. It’s problematic because there are no books or courses which can teach you everything, but you still have to figure out a way to learn
At this stage, you are your own teacher who has to design his own course and figure things out. You can reach out to new mentors – but often these will be in targeted areas. For example, if you want to learn more about a sector, find someone who has in depth understanding of it. You can find such people on social media – read what they write, ask them questions if you can
The same goes for any new area you are exploring. In such cases you are a novice. If you find yourself in that position, celebrate that situation. You have a beginner’s mind and can now experience the same feeling of doubt and confusion you felt when you started. That is the start of a new phase of rapid learning
In my next post I will dig deeper into how you can design your own learning process once you have mastered the basics
