After spending over a year buying and selling shares without rhyme or reason, I started keeping an investment journal in August 2023. I intentionally chose the month to avoid aligning myself with the market’s end-of-year craziness. I needed to move away from the noise and pressure of the market participants.
Since then, I’ve been writing quarterly reports for myself, and in between these, I’ve added various ideas and real-time lessons I gained from my forays into the investing world. I call them forays because I was dipping in and out without accurately thinking that investing is a way of life that affects you personally and professionally.
Because it was the first significant act of deliberate and structured learning, I attached quite some pomp to choosing a Moleskine notebook with rounded corners and yellow coloured pages. I’ve spent many hours thinking about what it should contain in the first pages, what principles I would use, what general strategy I would use. If you ever find a notebook with bad handwriting that states that you will receive a Big Cookie as a reward for returning it, then you know it’s mine.
But why a journal?
Don’t be silly. For one, I wrote small SciFi novellas in the fifth grade, when it was the Zeitgeist in the SciFi world to vanquish invading aliens with atomic bombs. I’ve been writing in my journal during the high school years and later writing more than 4000 articles on my blogs in the remaining 2 decades.
The second reason is more valuable: Writing about events and my reasons helps me be true to myself. As my life partner can attest, I have a notoriously bad memory, so I prefer not to go against my forgetful nature and write important things down. Every quarter, I check the reasons and actions from the start of my journal and discover that I recall things differently.
Because my memory is so different, investing is an overwhelming activity. Again, one of the things I learned from investing is that the lessons need to be applied in all domains of life, that I need to know my nature, and that I need to work with it, not against it.
The journal helps me be grounded and not lie to myself or anyone else. My partner can access it anytime and is always free to challenge any reason or action she reads about.
What have I learned by having a journal?
I’m glad the ether surfaced this question. The overarching sentiment about writing in a journal is that it disciplines me. Knowing that I have to write actions, steps, and conclusions, calculate some things, and outline my portfolio and lessons learned allows me to stay on track in my investing journey. It also allows me to be my person in this horde of investors stretched across time and space.
I first learned that discipline is more important than having knowledge or intelligence. I have an above-average IQ and expertise, however improbable that may be. Still, I discovered this is useless if I don’t measure myself and act rationally. Writing everything I can in the journal is my way of handling investing rationally.
The second thing I learned is that, as time went on, I traded less and less, acting more and more deliberately each time I needed to. Having to write down how many times I bought or sold certain shares or how many trades I did from one quarter to the other raised a mirror with a decidedly unpleasant image: I was trading like a crazed hamster.
The third lesson was about costs: by writing down how much it cost me to trade over several months, I noticed that a lot of money went into transaction costs and FX charges. About 40% of my expenses were FX, foreign transaction charges, and the rest were transaction costs. I decided to move away from Hargreaves Lansdown to Trading 212: the former has about 10 quid/transaction and 1% FX change if you buy US shares, which I do. The latter has only 0.15% FX charge and no transaction costs.
The fourth lesson I learned was that I am a good cash saver but have no skill in choosing good shares. Half of the shares went bust and the other barely moved. It’s not impressive at all, but I know this is a process I must go through and stick with forever. You can’t grow a tree in seconds. Everything worthwhile takes time.
The fifth lesson is that there is such a thing as FOMO, or Fear of Missing Out, which is why Tesla has been such a foul play for me. However, over time, FOMO has become less of an issue. When I read in my journal, I cannot help but feel silly, but I know I am still learning.
The sixth lesson was about taking losses. Whenever a share went against me, I still held on to it, hoping to recoup the money. It seldom happened. If the thesis changes or the reasons for my buying it no longer hold, and the share goes down, it goes on the chopping block. It still hurts, but practice makes perfect. And yes, there is such a thing as overpaying for a good company.
The seventh lesson I learned by keeping this journal is that position sizing matters greatly. I kept hoping that Luminar (LAZR) would return to level because so much of my portfolio was in it. It went straight to the gutter, and with it a good part of my portfolio. My rules about portfolio sizing are better now and I don’t feel the pinch as much if a share goes wrong. Instead of having up to 4-5 shares in a portfolio, my goal now is to have at least 10-12, but not above 20, because keeping track of many companies is hard.
Other lessons learned: don’t get too excited about a company or stock, continually refresh the watchlists, keep cash on standby to buy undervalued stocks, the importance of a checklist, setup clear sell criteria, focus on quality companies, and don’t overpay.
You can read about the above mentioned lessons in many investing books, but you must live and fail at investing to learn these lessons. I also learned not to shy away from failure and let it guide me.
In the complex and uncertain world of investing, I use my journal like a torch to light the way ahead.
This article has been first published in SIGnet Newsletter – March 2025 | Issue 63.