What is this?
Taking finite resources (time, energy, money, attention) and employing them to optimize an outcome. These are the first principles of investing. Investing can be simultaneously learned and reinvented. Even professional investors are constantly learning because, by nature, the world is changing and they have to adjust their strategies with it. As you learn more about investing there is always the opportunity to stop and ask "is this the best way to do this? Or is this just the way it's always been done?"
Investing is a skill that thrives in an interdisciplinary mind with connections across specialties and circumstances. Over your career there is value in focusing on certain stages and types of investing, but 'Investing 101 2.0' is a resource meant for you to first discover all the possibilities before specialization. Consider this a jumping off point; a general education for investing.
Investing 101 2.0 is a hub for articles, courses, summaries, books, frameworks, and interviews with both experts and up-and-comers across a variety of types of investing. This is not the end-all-be-all of investing educations. This is the front page for your general education leading you to the best resources out there to broaden your investing horizons. By using this resource you will better understand (1) the foundation of investing in terms of core principles, and (2) a broad exposure to different approaches and frameworks.
Who is this for?
This resource was originally designed with younger professionals in mind. Either college students working towards a career in investing, or recent graduates looking to make a jump from their first job into investing. But at the end of the day this is a resource for beginners and we're all beginners.
"One of the great paradoxes of inventing at a high level is that you need to be an expert in your domain area, and you need to have a beginner’s mind. You absolutely need both of those things. The world is too complex to actually just be a beginner. No matter how inventive I am, I can’t go invent a new kind of brain surgery. You have to be a neurosurgeon. You have to already know all there is to know about brain surgery, and then take it to the next level. The problem is, for many people, by the time they become true experts, they’ve lost that ability to see things in a fresh way. They’ve lost the beginner’s mind." (Jeff Bezos)
While this resource can be one step in helping you develop expertise, our hope is that it can be valuable for anyone as they continue to try and reinvent what it means to be an investor.
Never Stop Learning
“Once you stop learning, you start dying” (Albert Einstein)
Investing fundamentals are rarely taught effectively in a classroom setting. The real world is constantly changing and it is unlikely that an investor could be successful in identifying good investment opportunities if they are not continuously learning about the way the world is changing. So Investing 101 is not a concept just for younger entrants to investing. It is something that everyone goes through consistently whether they like it or not.
A Few Good Insights
"The only way to win is to work, work, work, work, and hope to have a few insights. And it makes sense to load up on the very few good insights you have instead of pretending to know everything about everything at all times."
Constantly learning does not require constantly learning everything. Particularly the way this resource is set up, you may wonder how you could master investing across public equity, private equity, venture capital, real estate, and on and on. The key is not to focus on how you can learn everything, but in identifying what you ought to be learning. Within the framework of Investing 101 2.0 the focus is on getting that "Psych 101"-type micro exposure to something to see how you like it and then make some more informed decisions about what areas to specialize. This can also be an opportunity for people with experience in one type of investing to explore another.
The concept will be just as applicable in the real world. As an investor you will progressively start to specialize. First in a stage of investing, then a subset of verticals or transaction types, and eventually you will hone in on a circle of competence. No one can be good at every kind of investing and every possible investment opportunity available. Instead, you "hope to have a few insights" that turn out to be very good.
"I got tired of [learning] things just to [learn] them. I wanted to get out there and test my ideas, get my hands dirty, test things in the real world."
Immersing yourself in videos, books, and articles from every great investor will never be enough to understand investing. There is a psychology of performance involved. The fear of losing money or time, looking stupid, or being wrong are tangible and impact your ability to learn.
You have to have a practice field. Somewhere you can actually evaluate an investment opportunity with real accountability and stakes. Finding an opportunity to put something behind your ideas is critical to testing whether those ideas are actually any good.
"We should be constantly searching, no matter who we are, for interesting ideas at the edge or frontier of various asset classes."
Good investors quickly find the balance between simultaneously understanding what is (current state of any asset) and what could be (the future potential) that you're willing to pay for now. When people invest in companies they put a premium on growth; it indicates a promising future.
But where investors are so quick to see the rapid innovation and opportunity in the investments they consider, they rarely see it in their own industry. Investing is still structurally very similar to what it was in 1970's with very few innovations. The people who know the least about something are often the best suited to invent the future of that thing.
"The trick [is] finding fantastic people and giving them the chance to be the best at what they do. We keep our edge by reinventing everything we do to make it better."
Understanding The Players
"Investing is a game of meta-analysis. Not a game of analysis. What matters is what you think relative to what everyone else thinks."
Investing is a competitive field across the board. When a few people make money investing a certain way it quickly attracts other people who want the same result. Then it becomes more difficult for any of them to make money with that same activity. Too much money chasing too few opportunities.
When you look at the best investors, it's usually difficult to go and compete with them by going head-to-head with them at what they're best at. You can never beat the results of the people who are creating the rules to the game if you're living by their rules.
There are genuine laws of nature that dictate how the world works, but they are the exception. The vast majority of "rules" exist simply because we say they do. Break the rules. Understand how your view is unique in relation to what other people think.
Disagree and Commit
"What is one thing that you believe that the vast majority of your peers disagree with?"
If you do what has always been done, you can never get better results than what others have gotten. Whether you're right or wrong, if you agree with the majority, that is the way to be average. The magic comes in being right when you disagree with the majority of people. As you reinvent your approach to investing, find these threads that you believe in, especially when no one else does.
How do I use this?
You'll notice that there are some pages in this resource that are incomplete. This is a constant work-in-process. This guide is structured as a "front page" to guide you towards useful resources as you need them.
Who made this?
This is an open community resource made by a number of contributors across levels of experience and fields of focus. If you have resources that would improve the quality of this wiki, please email firstname.lastname@example.org