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January 27, 2016

I am a retired American psychologist investor making around 25% capital gain per year for the last 15 years. I wrote 2 books on the psychology of investing. The books are not selling well because people believe that you need to know economics more than psychology to make money. Let me show you the main points  about making money in the stock market:  It’s psychology, not economics!

  1. Focus on making money your way only but pretend you listen to others, that means pick up only the right company, buy its shares low and sell high, that’s it! For example, as soon as I watched the movie Toy Story with my wife in 1998 I checked out a tiny company called Pixar that filmed it and an unknown CEO called Steve Jobs that bought it from Lucas from Star Wars and bought shares low! I connected the dots!
  2. Focus on selecting the best CEO (read my books or study personalities of CEO’s), your CEO’s great decisions are the only reason to buy the shares low! For example, as soon as CEO Bezos started Amazon I studied his personality and bought his shares, turned out a winner!
  3. Great decisions are behavioral and probabilistic, not what you fast think about but what you slow feel about, say and do! Great decisions are called System 2 analysis, not System 1 heuristics. Read Daniel Kahneman’s book “Thinking Fast and Slow.”
  4. Focus on building a positive relationship with money. A relationship with anything is a set of 10 sacred rules you adopt about that thing. For example, be more careful with your money if you come from a poor family!You tend to lose it and get back to your familiar expectations.
  5. Poor decision-making by the CEO is the only reason to avoid buying shares in his company. Simplify life!

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