I’ve been dealing with businesses, investing and marketing ‘stuff’ as far back as I can remember. I come from a family of business owners for at least a few generations.
And I run a startup… I’m not sure if this puts me at an advantage or a disadvantage. Interestingly, it wasn’t until a few months after starting a startup that I realised that I actually didn’t know what I was doing! Just being honest. (More about the power of mistakes in a future post).
It also dawned on me that there is actually a 99% (or higher) chance of failure.
Why bother when there is near certainty that this experience will probably be just that… an experience. Hopefully, it prepares an aspiring entrepreneur for the next venture. Cost of entry to big leagues.
There are a lot of books that talk about the <insert an odd-number> Steps To Business Success.
Unfortunately, these books are almost always useless. Many courses and seminars by successful entrepreneurs about how they made it are also useless.
I learnt something from Dr Van Tharp, a trainer of traders (http://www.iitm.com).
Van has trained many financial market traders and a few super-traders as well — some super traders have track records that will make Warren Buffet’s track record look like returns from a term deposit!
Back to what I learnt from Van — a trader must know himself before he can consistently make money. All of your success is related to your psychology. The ability to take losses and the ability to let your winners run. The ability to get back on the horse after falling flat on your face. (Apologies to Van if I’m not expressing his ideas as elegantly as he does).
Everyone’s psychology is different… which is why an asset class or financial instrument is irrelevant, i.e. what you use to make money is irrelevant. There are examples of people who have done very well in futures, options, stocks, commodities, properties, inventions, wines, horses, businesses, …
What you ‘trade’ needs to be consistent with who you are.
This is precisely why some introspection may be necessary before you attempt a risky venture. But mental work is hard work!
An even better approach is to just start — introspection through action! As long as you have your downside covered, you’ve bought a call option. That way you know your downside before you start. And this is far better than jumping in with rose-coloured glasses.
99% chance of failure… what’s not to like.