First off, let me say that I know practically no one will read this. I'm fine with that because it's more of a letter to myself than anyone else, but as the old saying goes, if I can save just one investor, I've done a good thing.
Let's go back about 3 years ago when I moved $100,000 of my 401K into a Brokerage link account allowing me to invest in anything and everything for $5.95 a trade. I left about half in the regular Fidelity account under 3 investments available to me.... Large Cap Growth, Large Cap Value and Retirement 2030 mixed bag.
The plan was that the "safe" account would be my "alpha" and the B-link would be my Seeking to "beat" Alpha account. It took me awhile to get my feet under me and get comfortable with making bigger and bigger investments. I used information and tips I gathered from a few Seeking Alpha contributors whom seemed to be the Alpha Dogs on this page. As I used their tips I honed a system of "don't get to greedy" morphed from the valuable tip about pigs getting slaughtered. Let me send up a huge red flag to myself here...Everyone in the world can tell you not to touch a hot stove, but if you've touched 10 cold stoves and lived to tell about it, your own brain will lie to you and tell you you're invincible, go ahead and touch it. The metaphor is any idiot can get lucky 10 times and convince himself he's a smart and savvy investor.
So my system was honed into swing a huge bat, but only try to get a single. I would make $20-50k investments and get out between 10-20% as quickly as possible. Well if you do the math, you can see that this accounted for returns of between 2000-10000 dollars on my successes. I was in, I was out, I was telling my wife "We made Eight Grand today!" I was taking the tips of SA's heavy hitters "free" stock tips, and playing the dips. What I didn't realize at the time was that, and this is KEY, I WAS FREE to do whatever I wanted. Nobody owned me!!!!!! Before I knew it, my $100k was almost 200K!!! and my Alpha was barely at $118K.
Another Huge Red Flag moment for me here...If you develop a system that works...DO NOT MESS WITH IT, until it stops working. Well as history tends to do, it wants to repeat itself.....and I got greedy. I thought hey, if I'm doing so well getting left over information from these heavy hitters, I will KILL IT if I subscribe to their investment service...I'll go from (retrospect) doing better than 90% of investors out there to doing better than 95%!!!! Wow, greed doesn't allow any mirrors in it's house does it, because that logic is plain stupid, but I didn't look at it that way.
So I plopped my $1500 down with someone who is more than happy to proclaim that my money will TRIPLE all over SA's site. I had done great on his second hand information, so if I could pay a little bit and get in on the ground floor of yet undiscovered, or misunderstood stocks.....hello million dollar account.
And that's when everything I had built came crumbling the F#@K down. What you don't realize when you skim the glossy websites really not even reading because you've already convinced yourself that this is a great idea, and just take me to the page where I give this guy my hard earned money, is that investing gets very complicated when you pair up with someone. More than that, you pay this person, so you really say to yourself, whatever this guy says, listen to him, even if you don't agree with him. In a sense you become MARRIED to his stock selections. They become your whole investment life. There are thinly veiled warnings on the page about making these investments of a small percentage of your account, but show me the investor who doesn't juice the hell out of that percentage. Then you learn that "well, the idea is buy and hold, but if you really want to make money, you're gonna have to constantly monitor and trade the hell out of this stock whipping around like a dragons tale"
Common sense came to me when I was down about 50%, and it's always been the truth...If you're a great stock picker, you pick stocks and make a fortune and live your life. If you're an ok investor and market yourself as great to get throngs of people giving you money AND investing money in stocks with otherwise no interest, thus causing them to go up, well then you've fooled the world and there are a number of other things I'd like to call you.
So in summation, my point is, if YOU develop a system that makes YOU money whether it's 1% or 100% more than the market average..Stick with it, WORK IT, shut your mouth, and for the love of God and money, don't deviate by getting greedy. I cannot stress the importance of freedom of investment. You do not want to be married to someone else's stock picks. It KILLS your spirit to seek and find good investments. You're putting your skills in a nursing home where they will die. The road to riches and security is LONG. Pigs get slaughtered.