The reason I want to write this article about real and fake investors because I see too many fake investors call themselves expert and “educated wealth manager”. It is so sad for people who believe how fake smart they are and loss people’s money again and again. However, they don’t lose money at all because they will charge their clients management fee and get money from that. Many hedge fund and private equity manager will charge 2% management fee even when they have bad performance on market.
Most people will go to school and learn stock market or trading class about investment bank such as M&A. However, 90% of school’s teachers don’t have real experience in stock market or never work with investment bank ever. How can they teach investment? And how could people learn from them? I will give a very good example of trading stock market and fake teacher vs real teacher. Many teachers will tell you to try paper trading which is fake money and image people buy stocks to avoid making mistake. However, good wealth managers are learning from their mistake like Ray Dalio and Peter Lynch. If we don’t make mistake how could we learn from trading and avoid making same mistake to be better? This is fake teacher. Another point is about emotions. Real money and fake money will treat investor different because you probably will lose your lunch meal for next week because you can’t hold your emotions and scared to lose all your or your parents’ money. Fake teacher will lead fake students. And fake students will become future fake wealth managers.
I started trading stocks three years ago and still make a lot of mistakes. Even Ray Dalio went bankrupt when he was 30 years old. We are humans. We will make mistake, and this is how we could learn more knowledge from our mistakes and change it then make it better.
From the beginning, we think we know more things than we know. Then, we will make mistake and we notice that our actual knowledge. Then we will study it and learn from the mistake and make it better. This is how real-life learning and studying circle. Most people just avoiding mistake and keep move to another part, but they will make the same mistake again and again.
This is the biggest gap between real investors and fake investors. Learning, most hedge fund managers and private equity managers don’t study from their mistake. They try to avoid it and they don’t try to change it. My weakness is financial report. Then, I try to read one report every week and find the most important information in the company’s report and study for it. I am not saying that I am real investor. However, I study hard for my mistake and my weakness. Also, I will keep posting my thoughts on the market and my personal investing life with people.