Learning to live or deal with doubts is a hallmark of a good investor by David Merkel, CFA of Aleph Blog
I try my best at Aleph Blog to phrase things in a way that conveys my level level of certainty. But I have my doubts. Learning to live or deal with doubts is a hallmark of a good investor.
So as the stock price drops, drops, and drops again, what do I do? I reread the fundamental data to see what I might have missed. I read contrary opinions. Then I ask the question: knowing what you know now, would this qualify to be in the portfolio? If not, I sell it. In rare cases, if I think it is unfairly trashed, I will make it a double-weight. So far, I have not lost on anything I made a double-weight.
All investing involves doubt. We don’t know the future; we are making educated guesses at best. Am I sure about future earnings? No. Do I know what industries will outperform? No. In general I have done well with both, but it is an art, not a science.