Chris Williamson posted a video about life unteachable lessons. These are lessons he defines as obvious lessons (basic b*tch) that people from generations before us have warned us about. Yet almost always, we refuse to pay attention to them. As a matter of fact, we are so adamant that these lessons will not apply to us that we have to learn them through our own experiences first hand. In the end, it becomes a bitter pill to swallow once they are learned.
I’d say that the texture of his essay is complete because they are not about the lessons themselves, but it is about our psychology in viewing them before we experience them and after we experience them.
Before we experience these lessons, we will think to ourselves and proclaim to the world:
This is not going to apply to me. I am different. I am special.
My background is different.
After we experience these lessons, we will broadcast our learning in the grandest of manner saying to people how important it is based on your experience. Yet we will be met with a wall. Only a handful will probably truly pay heed. And the rest will go on their ways.
But why? Perhaps it is because the lessons are trite. So trite that I cringe reading them. Here are some of them:
Money alone won’t make you happy
Fame won’t give you self worth
You should see your parents more
It’s perfectly OK to cut toxic people out of your life
Worrying is not improving your performance
All your fears are a waste of time
You chase the beautiful woman or handsome man not because you love them, but because they are physically attractive and hard to get
and so on.
Cringe isn’t it?
Well, investing is a subset of life.
And in this essay, I am going to repeat some investing unteachable lessons. These are the lessons that at the start of your investing journey, you will often hear from more experienced investors. But because you have not experienced investing yourself, you would almost always think that:
This is not going to apply to me. I am different. I am special
I know myself well.
How do I know this? Because this is what I feel when I first started investing. These advice are so commonly given by great legendary investors yet they are usually not taken seriously at all. I always say to myself:
Watch me invest while being able to stay detached from my emotions, while being able to always make the right call, while being able to be truly independent in my thinking, while not being able to be envious of other people’s returns and so on.
And then I would go on and make those mistakes myself 🙂
The craziest part is that here I am writing about those mistakes “warning” people about how important it is to learn from them and to not commit to them. Even when I know for myself that people are going to not take seriously. It is truly a mind blow isn’t it?
The pattern that I am seeing is that people will experience one or two lessons. Then cast blame on some external factor:
macroeconomy
government
geopolitical factors
Then they will proclaim that I am not the problem, these other guys/factors are causing my investments to fail. Because of that, I can no longer invest.
So here it goes. The lessons are trite, you have been warned.
Lesson number 0. Psychology in investing is important.
It is blatantly obvious that the same analysis of an investment opportunity, could lead to ultimately very different behavior in terms of buying or selling positions. That ultimately will also affect investment returns. Most spend most of their time on the analytical framework, which is reasonable. But not enough time and resource is being spent to study and then optimise behavior that would be ideal for us to achieve consistent investment success.
Why people don’t take it seriously:
I think because people tend to hate to admit that they don’t have a handle on themselves, that they don’t know about themselves and they are not fully a master of themselves. While in actual fact, knowing and mastering yourself is one of the most difficult things that one could do.
Keeping a promise to yourself is hard. Not lying to yourself is hard. Staying accountable to yourself is hard. Knowing how we feel in the moment is hard. Knowing your true preference vs others’ expectations masquerading as your own passion is hard. These things are so hard that Sun Tzu opened the Art of War with them: know yourself.
But somehow, we don’t want others to see that we are struggling with ourselves and therefore we choose to ignore this lesson altogether.
Lesson number 1. Greed will make you buy the top.
Every legendary investor tells you the same thing: be fearful when others are greedy, be greedy when others are fearful. Buffett said it, but he inherited it from decades of markets repeating the same story. The quote now is everywhere in the investment space. It even gets used to support an investor’s confirmation bias, or hope strategy.
Why people don’t take it seriously:
Perhaps people become greedy anyways because it does not feel like it. It feels more like rare phenomenon. An exception to the rule. “this time is actually different, we are colonising Saturn, we are mining in the moon, intrinsic value does not matter now.”
I believe nobody sits at their desk near the top of a bull run thinking “I am being greedy right now.”
It only reveals itself as greed later on in hindsight, once the position is down 60% and staring at the screen asking what you were thinking then.
Lesson number 2. Fear will make you sell the bottom.
The mirror image of lesson one, and somehow just as unteachable. Don’t sell in a panic, the market always recovers, time in the market beats timing the market. You’ve seen 1998, 2008, 2020, 2022 all bounce back eventually. You understand, you’ve seen the charts. And you think to yourself: “I will not sell my positions during a market downturn”
And then the drawdown actually happens to your money, and every rational thing you knew evaporates. Howard Marks calls the endpoint of this capitulation.
Why people don’t take it seriously:
I think it is because fear disguises itself as prudence. “I am just protecting what I have left” sounds responsible. It sounds like risk management. It only reveals itself, in hindsight, as the single worst decision of the cycle. A missed opportunity.
When else will I get to buy that asset again at that bargain. 10 years later the opportunity comes and most will sell at the panic again. That is just how it is.
Lesson number 3. Ego won’t let you admit you’re wrong.
You buy a position. It goes against you. Instead of selling, you average down — not because the math says to, but because admitting the mistake feels like admitting you were the mistake, in front of the people you built the ego to impress.
That’s the trap: the ego built to win the social game is exactly what makes you worse at the real one. Investing rewards humility — updating your view the moment the facts change. Ego needs to be right. Investing needs you to become right and strangely by admitting when you weren’t.
Why people don’t take it seriously:
Perhaps it is because ego is invisible to the person carrying it. Nobody thinks “I am too proud to admit this trade is bad.” They think “I still believe in the thesis” even though the data says otherwise.
Lesson number 4. Envy will make you abandon what works.
You’re doing fine. Your process is sound. Your returns are reasonable given your risk tolerance. 15 - 20% per year for 4 straight years. Not crazy good, but not bad at all.
Then a friend on a group chat posted: +62% YTD. And also a chart of his investment performance. You then think to yourself, what am I doing wrong? My numbers look small compared to this guy. All of the sudden your good strategy feels inadequate.
Howard Marks puts it bluntly that envy causes investors to abandon sound approach in favor of chasing that new method some else is using. Not necessarily because the new thing is better. But because someone else made more money in the moment.
Why people don’t take it seriously:
Perhaps because most people never register it as a trade-off. Chasing someone else’s return doesn’t feel like giving anything up — it feels like a going for a better outcome.
What it actually is, is a swap. Optimising for staying in the game and optimising for looking good this quarter are not the same objective, and most people never notice they’ve switched from one to the other.
We are very well aware that value investing might not produce the best returns in this quarter. But when it does, there will be plenty who want to switch strategies to do value investing.
Bonus lesson: compounding is slow and underestimated
This lesson is exceptional because it is very, very unteachable. Even when I repeatedly say: we tend to overestimate the things we can achieve in a week, but underestimate the things we can achieve in 5 years — I still commit to trying to achieve too much, and worry if I haven’t done enough during the week.
The craziest part is I know the maths. I have run the compounding table more times than I can count. I know that flat, unremarkable-looking growth in year one and year two turns into something that looks like a hockey stick by year eight, if you just leave it alone. I’ve read the studies. I’ve made the spreadsheets. And I still catch myself, quietly measuring my progress against a timeline that has no relationship to how compounding actually works.
It’s not a knowledge problem. Nobody fails to compound because they didn’t understand the concept. They fail because understanding a concept and feeling it in your bones on a random Tuesday when nothing seems to be happening are two completely different things.
Closing Remarks
If this essay has allowed you to ruminate some of these hard earned lessons without you actually experiencing them, it has served more than its intended purpose. Sometimes, some things are meant to be learned the hard way, but not always. If you think that this essay would be helpful to anyone in your circle, go on restack or share it.
Cheers!