Think Like the Great Investors: Make Better Decisions and Raise Your Investing to a New Level

Chapter 18

What do you want to do? (regret)

The literature of investment is littered with references and allusions to military terms. Books have been written about the ‘investment battle’ and are replete with references to market warfare, campaigns, cut and thrust, pre-emptive strikes, manoeuvres, strategies, poison pill defences, tactics and takeover defenders ensconced in a bunker. While some of this is just colourful analogy, if we are asked when we first start out as an investor where the investment battle is fought, our consistent answer will be that it takes place in the market. When we begin investing we instinctively think that the investors with the best or the most knowledge will win the battle. We tend to think intuitively that, if only we knew as much as the great investors, then we too would win the battle.

The sad truth is that this is one of the great blind alleys in learning to become a successful investor. The key battle is not fought in the market. It takes place in our minds. It is not what we know that determines investment results, it is how we think. There are several aspects to this, but arguably the most important is that successful investors take responsibility for their decisions, not just when investing, but in all facets of their life.

Regret is the discomfort or pain we feel when we suffer a significant loss, after we made a decision to buy a stock. ...