Investing is Learning

As I have become a more active investor in the stock market this year, I have come to realize that investing can really help you understand business better, with broad application across not only your personal investing activities but also your career.  As an investor, you learn what drives the different businesses you are investing in and how they operate within the broader context of the economy.  You also learn how these companies deal with both internal and external challenges, such as maintaining margins / profits, competitors, or the US-China trade war / tariffs.  All companies have to deal with these issues in one way or another and so this helps bring focus to different strategies that you might even be able to use in your day to day work.

This learning can be accomplished by reading articles written about the company, analyst information (Zack's has great free analysis), the investing community's thoughts (such as StockTwits), earnings releases and especially listening in on earnings conference calls, which contain a lot of information about a company, its recent performance and near term prospects.  It's especially interesting to see what questions the analyst community has and how the management team responds to them.  As it relates to your career for example, if you are in the retail business, there's nothing like listening in to a conference call from a retailer that you may be competing with directly or indirectly to learn more about how they are succeeding (or not succeeding) and what they are doing to manage their business.  I also like to read general market websites such as Yahoo Finance, Marketwatch or Seeking Alpha and I also subscribe to select newsletters from those sites to get a daily feed of market information that I'm interested in, including information about stocks that I own or that I'm following.  As I have written about before, I really like Robin Hood's app and find it really easy to use to do research and also buy and sell stocks and options.  As a result of my research habits, I have found that I can apply much of what I have learned as an investor in my work and in my other investing activities.

In short, investing is learning.  Of course, if you do well and make wise investments, you get paid well for your learning and if your investment doesn't work out, you get an extra, perhaps more costly lesson.  Maybe you learn not to take such a big position next time, hedging a bit more, sitting out or maybe just doing a bit more research before taking an investment position.  Losses happen in investing, but as long as you are learning and applying what you learned the next time and getting the added bonus of accelerating your career development, that's the important thing.


I hope you find this post useful as you chart your investing course and Build a Financial Fortress this year.
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