5 Things (Investing Related) I've Changed My Mind On

I like to think I’m a flexible thinker, but really I’m probably just average. Having said that, I thought it would be fun to go over five investing-related that I have changed my mind on in since I have started down this journey.

1 - Dividends

I never understood investors who focus on dividend-paying companies. If a company has excess capital, it should return it to shareholders—sure. But who really cares whether it’s a regular dividend, a special dividend, a buyback, or an SIB? The obsession with dividends was where I got stuck. I think this was because for so long I focused in hitting escape velocity and that meant mainly investing in companies that did not pay dividends.

Where I’ve shifted is in appreciating the psychological side. For some investors, the stress of market corrections is easier to bear when they’re receiving a steady stream of income from their holdings. Staying in the game is the most important thing—even if it doesn't produce the absolute highest IRR.

2 - Going Full Time

I have been doing the full time thing for awhile now, and I love it. It suits my personality well. But the more people I meet, the less I think it’s the right move for most investors. I’m not entirely sure why, but here are a few theories:

• Comparison is hard. Most serious investors are high-performing and competitive. Going full-time can be isolating—and if you’re used to benchmarking yourself against others, that isolation can eat at you. X (formerly Twitter) is full of anonymous accounts constantly crushing the market.

• Loss of identity. At a corporate job, you probably carved out a reputation as “the investing guy” in your office or friend group. Leave that behind, and you go from having a clear identity in a small circle to being a nobody in a sea of anonymous investors.

This doesn’t mean it’s wrong for you. I just used to think more people should be obsessed with hitting escape velocity like I was. Now I think it’s more nuanced. If you are interested, I wrote about what to think about when going full time here.

3 - Turning Over More Rocks

I’ve heard all the Buffett and Lynch advice about going from A to Z and turning over every rock. But I’ve learned that isn’t for me.

I’d rather cultivate a high-quality network and source better ideas that I’m more likely to hold long-term, rather than chase needles in haystacks. Sure, if you find one good idea in 1,000 companies, you did a good job filtering. But if I give myself free rein to look at 1,000 companies, I’m pretty sure I’d end up buying some garbage that offsets the winners.

Don’t get me wrong—I still look at a lot of companies. But my network has proven more valuable to me than any SEDAR or SEC screen that I have run.

4 - The Amount of Math Required

I think many come at investing thinking like an engineer. And maybe that’s the best way or that’s the best way for you, but’s not the best way for me. I started by thinking I would math my way to high returns. I thought I would build complicated models for each business and project well into the future. I was wrong.

My best returns have come from simple math and having the conviction to hold or add when others bail. The hard part isn’t Excel—it’s staying put in obscure names when everyone else is getting rich on the stuff you didn’t buy.

5 - More Time ≠ More Success

This ties into points 2 and 3. I’ve noticed a steep drop-off in my ability to perform after a certain number of hours. The first few hours of deep work each week are high quality. The 50th hour? Basically useless.

I’m not talking about admin work like updating a model or prepping for an earnings call—that’s fine. I mean deep analytical work. After a certain point, I’m better off switching gears entirely.

It reminds me of junk volume in strength training. Past a certain threshold, more reps don’t lead to more strength—they just wear you down.

Final Thoughts

I hope you enjoyed this one. If you’ve changed your mind about something in your investing process, I’d love to hear about it in the comments.

Thanks for reading.

—Dean