Your Greatest Enemy is Yourself

“Your greatest enemy is yourself” is an ancient Chinese piece of wisdom. The only person you need to beat and conquer is yourself. How many entrepreneurs have proclaimed that they plan on creating the next Wal-Mart, only to work a few hours a week on their “epic” business idea? How many times have you said that you won’t give up, but in reality, run away at the first sign of trouble?

Investing is no different. Without discipline (let me say this as harsh as possible), you are A NOBODY. You can subscribe to the greatest investment newsletters. You can buy a library full of investment books. You can attend every single investment seminar in town. You can probably even buy a $3 million investment system, but in the end, you’ll find that you’re no better than the average Joe Schmoe if you don’t have the courage to discipline yourself. You may have immense amounts of knowledge about “how to” invest, but without that discipline, good luck with your futile attempts to apply that knowledge into decent investment returns.

Thus, your greatest enemy is yourself. Your greatest enemy is the weakness, laziness, and emotions inside you. In order to instill discipline in yourself and fight the “Satan” in you, here’s what you need to realize.

“Be greedy when others are fearful and fearful when others are greedy” is hard. Most investors are the “do as I say, not as I do” kind of preachers.

You’ve probably heard of this from the Buffett PR machine. In fact, almost every single investor preaches this line. But how many are able to talk the talk and walk the walk? The truth is, being greedy when others are fearful is hard.

Most people that preach “buy when others are fearful” end up selling with the crowd when a stock market crash comes along. It is only normal for one to feel fearful during times of market distress, as you are afterall human. But the successful investor conquers his/her’s fearful emotions, and buys into such a great opportunity.

Many also preach that one should “sell when others are greedy”. This is true, as you don’t want to follow the proverbal herd over the cliff and lose your shirt in the ensuing bursting of the bubble. But how many Americans are actually capable of doing what is preached? 99% of investors who preach the “sell when others are greedy” can’t control their own greed, and buy into the bubble, only to get killed in the ensuing bloodbath. It’s natural to feel extreme optimism and greed when the financial markets are rising day after day. But the successful investor controls his/her’s greedy emotions, and sells into the panic.

So instead of spending time preaching ” buy when others are fearful and sell when others are greedy”, make sure you walk the walk.

Fight your “I don’t want to learn new things.’

Humans have a tendancy to be lazy. We dislike learning new things, and prefer to use old methods that we already know to tackle new problems. The problem with is, often times we’ve lost a good chunk of our investment portfolio by the time we’ve realized that our old investment strategy doesn’t work. A good investor always keeps an open mind, and is constantly on the look out for an investment strategy that better suits the times than the strategy that they’re currently using.

Fight your “I’m not wrong” attitude.

Nobody likes to admit that they’re wrong. The reason why George Soros is such a successful investor is because he’s 100% willing to accept the fact that his investment judgement was wrong. 99% of people refuse to admit they’re wrong. For example, most people refuse to sell after the bubble has burst, hoping that they’re not wrong.

A successful investor is always ready to fight his  own stubborness and “I’m not wrong” attitude.

Fight your “This is too hard. I give up.” attitude.

Yes, we’ve all been taught since kindergarten that perseverance and persistence is the key to success. Far easier said than done.

This list can go on and on and on……. I think you get the point.

9 thoughts on “Your Greatest Enemy is Yourself”

  1. After some bad choices and the loss of a job, I have just now begun to follow a budget and am looking for all the guidance I can find. Keep up all the good advise you give!

  2. I can say that from my experience, I feel differently about each investment when stocks get hit. Some I want to get cheaper because I want to buy more (it has taken some gnashing to psychologically get to this point – to assess the situation objectively). Others I have fear.

  3. This is so true. I have to amdit that I am not great on discipline. for example, following a budget can sometimes feel so… restricitve. But I am learning! 🙂

  4. Staying disciplined or adhering to an investment strategy becomes difficult particularly as the stock market is volatile or plummet. I stick with my strategy, but I know it is difficult.

  5. Most people don’t fail because they don’t know what to do. They fail because they don’t act on what they do know.

    I know how to follow a budget. It’s not difficult concept. But very few months go by where I am disciplined enough to stay within every category in my budget.

    1. Exactly. We can all learn this stuff straight from a textbook. You basically summed up everything I said in 2 lines. XD

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