Making Trade Decisions

I tend to make trade decisions quickly. I move fast to buy when identifying value or to sell when noticing an insufficient investment case. As a small holder, I can move in and out of positions without moving the price. Perhaps my decision making would improve by taking more time resulting in less flipping, but usually it doesn't cost to change my mind.

If I end up managing larger amounts of money then I will need to do more work before taking positions. I have adjusted my approach recently to buying in stages (compared to taking full positions straight away previously) and will continue to adapt as my capital base grows. My recent Identitii purchase is a good example, where I have bought an initial 1% position.

I find there is another advantage to taking a position early in the research process. Having a position helps me focus on identifying risks. I get a gambler's buzz from the anticipation of executing a purchase. This makes it harder to objectively value stocks that I don't hold. Once I have a position the effect disappears and I can more clearly assess what could go wrong. Now my psychology swings too far the other way, loss-aversion kicks in and the risk becomes selling good investments because of irrational fear. I even find benefit from buying then selling before buying again as I get to see from both sides.

I think the crucial thing is to constantly investigate stocks, whether they are in my portfolio or not.