Newbie advice

[misscambodia]

Advice

- Treat your $7k as gone/lost when you invest. When it does not matter, then there will be less emotional baggage
when investing. That is important because the markets will test your convictions through your emotions. When you
start personalizing the unrealised gain/loss, the markets will inflict emotional pain to make you cut your position so that
you can feel better despite it is the not the right thing to do at that moment.

I was confronted with a question before.

Mr. Buffett said, “Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1″, but value investing gurus said "Treat your capital as gone/lost when you invest"? Which is correct?

My answer was both were correct. The former is the "Tao of Warren Buffett's", while the latter should be interpreted as "your capital should be spare cash". It will allow you to stay vested during the irrationality of Mr. Market, rather than to take loses lightly.

(to clarify, in case any confusion)

The actual act of pitting money on the table is priceless.

It allows us the really know where our limits in volatile times.

E.g. Do we buy oil companies / swiss companies after a big drop / on going drop, when to buy and when to sell or withdraw.

At the same time building knowledge to look for information while all these events are happening.

btw, Now would be a very bad time to buy swiss company. lol