Investor Psychology and Behaviour Patterns: how many versions of yourself has the market created?

vikas_chandrawat · June 14, 2026, 9:14am

Goal of this thread

I have been spending quite a lot of time on Valuepickr recently. One thing I have particularly enjoyed is reading investing journeys and lessons accumulated over years of market experience.

I have a bias towards thinking of investing from a behavioral lens more than the informational lens. Naturally, I enjoyed reading topics like “21 years of lessons…”, “my investing journey..” etc.

One thing I observed is that most of these journeys have been documented by seasoned investors. They are immensely valuable, but they also make me wonder about the journeys that are still unfolding – the intermediate investors, amateurs, and beginners who are currently going through their own transformations.

Similar to the stories and lessons of seasoned investors, I think the stories that are yet to unfold from a wide range of investors (seasoned, intermediate, and beginners) can serve as good lessons for us all. I believe the stories have the power to reveal certain emotional triggers, patterns, and transformations we all go through as investors. And these stories can serve as “open to interpretation” lessons for the readers.

Every investor was once a very different investor than the one they are today. Everyone has gone through some transformations where the initial philosophy, thinking, mindset, and learnings have evolved into something more resilient and mature.

The goal of this thread is to document exactly that and invite investors from all ranges (especially intermediate and amateurs) of investors, as their transformation stories are not that visible and are buried deep in their own personal journey & portfolio threads.

With that being said, I will contribute and start with my own transformation story.

From 80 to 8, From FOMO to Framework: My 6-year journey

I started my investment journey in November of 2021.

My startup (which I co-founded in 2017) received Series A funding, and I finally started getting a decent salary after years of minimum-pay founder hustle. As I come from a middle-class family with a culture of savings and minimalist living, I didn’t have a lot of avenues to spend my earnings. Naturally, I started investing.

At the start, I didn’t have any benchmarks in my mind. My general idea was that it’s better than keeping money in a bank account. This beginner mindset of mine was somewhat advantageous because I did not go out looking for quick returns.

I started investing in large-caps and companies I had heard of. My “thesis” was little more than an opinion, and I didn’t even know the concept of an investment thesis at the time. For example, I would invest in Reliance because it’s a big, successful, large-cap stock, and they have lots of resources and connections to keep surviving and growing as India grows.

I would document nothing; I would buy every month in an unofficial SIP format.

Because I come from a background that is extremely cautious about money safety, I never invested more than 15–20K INR in any one stock. Only later did I realize this mental bias of mine, which stopped me from going deep in one company both in terms of knowledge and bet size.

Things went well without me ever questioning whether I was moving in the right direction. The post-COVID bull run definitely helped in not asking the uncomfortable questions.

Then came April 2022 and with it the Russia–Ukraine war. If I had been running a concentrated portfolio, this event might have forced me to examine why my portfolio suffered and what assumptions I had made. Because of my ignorance-driven over-diversification, my portfolio did not experience any meaningful drawdown. At that time, drawdowns were the only thing I looked at.

What I think was really happening psychologically:

Familiarity over understanding: I was buying companies I had heard about, not companies I understood. Familiarity felt like research.

Fear of being visibly wrong: My position sizes were small, not just because I was cautious. Concentrating capital would have made me make an actual decision and made my mistakes more visible - I wasn’t ready for either.

Diversification as emotional and mental comfort: Looking back, diversification wasn’t only about reducing risk. It also reduced the emotional discomfort of being wrong on any single idea. It also reduced the mental effort needed to take a position.

Bull-market comfort: A rising market delayed self-reflection. Positive outcomes hid weaknesses in my process.

Transformation 1

My first major transformation came around the end of 2023.

What triggered it was the realization that I had accumulated nearly 80 stocks in just two years. The portfolio had become too large for me to understand, let alone manage. I would do a pointless color-counting exercise, counting how many of these 80 stocks were green and how many were red.

At this point, I started noticing that my mutual funds were delivering better returns than my stock portfolio. I also realized that 80 stocks were simply too many for me to track effectively.

I knew I needed some sort of system.

Two things happened during this phase. One helped me grow. The other hurt my portfolio.

The good thing

I finally decided to study the stocks I owned from a business and industry lens. I started with macro-level understanding and chose energy and capital goods as sectors I wanted to bet on over the long term.

With this in mind, I created an Excel sheet of all my holdings. I added columns, started documenting bullet points about each company and assigned my own subjective ratings of good, bad, and great.

For the first time, I benchmarked my returns against the index, and I was disappointed.

I also did a rough capital allocation exercise for the first time.

The bad thing

I over-simplified some investing concepts I would hear repeatedly. One of them was:

“Bet on your winners.”

I didn’t make the effort to understand what a winner actually meant. I simply assumed my biggest gainers were winners because the price had gone up. This made me invest larger amounts into stocks near their peaks. I was following the conclusion without understanding the reasoning behind it. At the same time, I averaged down some of my biggest losers. So I didn’t even follow the half-understood concept I was trying to apply.

When I think about that phase now, one lesson stands out: Incomplete knowledge is worse than no knowledge at all.

My first transformation taught me that activity without a framework can be dangerous. I was trying to improve, but I had neither a system nor a mentor to guide me.

What I think was really happening psychologically:

The illusion of control: The spreadsheet, ratings, and categorization gave me a sense of control over a portfolio I barely understood.

Learning conclusions instead of principles: I heard investing lessons such as “bet on your winners” and adopted the conclusion without understanding the reasoning behind it.

Mistaking price performance for skill: I assumed my biggest gainers were my best ideas simply because the stock price had gone up.

Activity as progress: I confused becoming more active with becoming better.

Transformation 2

My second transformation followed soon after. By this time, I had realized two things:

Averaging down my losers had been a mistake.
An 80-stock portfolio was never going to work for me.

This phase was driven by a need to simplify my portfolio without really knowing how. So I chose the easier methods (not correct, just easier), such as booking losses on positions that were deep in the red.

As a result, I often sold at the worst possible time. At the same time, I further doubled down on positions where I was already sitting on significant gains.

One such stock was KPIT Tech. My average purchase price was around ₹700. I added so aggressively during the mid-2024 peak that my average eventually moved up to nearly ₹1,500. Today, KPIT is one of my biggest losers.

This was also the phase where I entered the world of Twitter stock tips. I spent a huge amount of time consuming content from people posting sophisticated-looking analysis and stock recommendations that I neither fully understood nor bothered to understand.

I was deep in FOMO. Every portfolio screenshot felt like evidence that someone else had figured out a game I didn’t understand. I never questioned the authenticity of those screenshots. I never asked how much risk was taken to achieve those returns. I never asked what mistakes were conveniently omitted. I only saw the outcome.

Almost all of those portfolios contained a handful of stocks that were missing from my own 70–80 stock list, which only intensified the feeling that I was falling behind.

During this phase, I also started paying attention to valuation. Ironically, I was simultaneously buying some of the most hyped stocks at stretched valuations. My valuation process was still immature (it still is). Most of the time, I compared P/E multiples across completely different sectors without fully understanding the differences in business quality, growth rates, or cyclicality.

For the first time, however, I researched a stock entirely on my own. I wanted exposure to solar manufacturing and studied several companies before eventually choosing Alpex Solar. The stock remains my largest position today. It has experienced wild swings over the years, but I have been able to hold it without losing sleep. That is probably the thing I am most proud of.

More importantly, it became my first proof that self-developed conviction is the only kind of conviction that survives drawdowns. When the market ignores a stock, borrowed conviction disappears quickly. Genuine conviction survives because it is supported by facts and understanding of your own.

After all this, I had a lot of hope from my mid-2024 portfolio reshuffling. Turned out, things got worse. Over the next 12–14 months, my portfolio went nowhere.

In some periods, it even fell while the broader market remained resilient.

My hyped positions accumulated losses. The positions I aggressively added to also started hurting. The confidence I had built during my restructuring phase slowly disappeared. All this made me lose enthusiasm and stop tracking my portfolio regularly. I stopped adding fresh money as well.

This continued until October 2025. For the first time, I wasn’t frustrated with the market. I was frustrated with myself.

What I think was really happening psychologically:

Borrowed conviction: I was consuming other people’s conclusions without building the underlying understanding myself.

Social comparison: Portfolio screenshots made me feel behind, even when I had no idea how those returns were achieved.

FOMO: The fear of missing the next multibagger became stronger than the fear of making a bad investment.

Authority over understanding: Sophisticated-looking analysis often convinced me even when I didn’t fully understand it.

Judging outcomes instead of reasoning: I judged ideas by recent stock performance instead of the quality of the original reasoning.

Emotional relief disguised as decision-making: Selling losers often reduced discomfort immediately, even when it didn’t improve the portfolio.

Transformation 3: The Current Phase

After more than 6–8 months of my temporary mental exile from the markets, I started looking at my portfolio once again.

What triggered my interest this time was that my consistent savings habit had grown my corpus into a sizeable amount that could benefit meaningfully from compounding if I truly put my mind to investing.

The bigger catalyst, however, was something else. I stopped enjoying my work. I had been an entrepreneur my entire life. My startup had raised venture capital. The team had grown. The responsibilities had changed. My role evolved from being an individual contributor to becoming a people manager.

I realized that I did not particularly enjoy managing larger teams. At the same time, there was constant pressure around growth, fundraising, and valuation expectations.

All of this triggered a chain of thought. I started thinking about leaving. The company itself was in the middle of a business transformation, so a clean exit was not immediately possible. Leaving would have involved compromises. This wasn’t the kind of exit that would permanently change my financial future. But I had reached a point where I was willing to take another chance on life.

This period fundamentally changed my relationship with investing. For the first time, investing stopped being a side activity. I wanted it to become a genuine skill. This trigger made me realize that I needed to become very good at investing while pursuing future ventures and projects.

By this time, I had also accumulated a lot more business understanding. The previous year had been spent helping transform our startup from a low-monetization, high-engagement product into a business designed to generate meaningful revenue.

That experience changed how I viewed companies. It also changed how I enjoyed researching stocks. Previously, my joy came from the fantasy that I would invest, and my money would grow. This time, I genuinely loved the process itself.

For the first time, I was curious about businesses even when I had no intention of buying their stock. I found myself wondering:

How did the promoters build this business?
What growth strategies are they betting on?
What advantages do they possess?
What mistakes could derail them?

The process itself became rewarding.

Armed with this new motivation, I dedicated my energy toward learning instead of portfolio activity. One video from Mohnish Pabrai discussing compounding and the Rule of 72 completely changed how I thought about capital allocation and long-term returns. I already understood compounding intellectually. But for the first time, I started modelling it against my own capital.

I obsessively calculated potential corpus sizes under different return assumptions. I looked at different asset allocation scenarios. I evaluated how much return I actually needed to achieve my goals. This gave me enormous confidence.

I realized that consistency matters far more than the extraordinary returns that dominate social media screenshots. I also spent significant time listening to investors such as Mohnish Pabrai, Warren Buffett, Howard Marks, Vijay Kedia, Madhu Kela, and Rakesh Jhunjhunwala.

Instead of collecting stock ideas, I started collecting principles. Most of those principles revolved around high-conviction, concentrated bets, sufficient diversification, risk management, valuation discipline, and emotional control.

Apart from these mindset shifts, I also started analyzing myself. I went through my historical trade books. I reviewed old decisions. I looked for patterns. A few observations stood out:

I was surprisingly patient and could tolerate drawdowns reasonably well.
My worst decision-making period was concentrated around early to mid-2024 and was heavily driven by FOMO and half-baked knowledge.
My entries and exits were largely random.
I never had a written thesis. I never had exit conditions.
I never had a structured review process.

Interestingly, many of my stocks themselves were not bad investments. Several generated returns exceeding 100%. The problem was position sizing and conviction. I never built large positions in my strongest ideas (or should I say my strongest outcomes), and I never systematically removed weaker ones.

Eventually, I developed a simple operating system:

Most capital remains in diversified assets like index ETFs and mutual funds.
Direct equity positions are concentrated and capped.
Every position requires a written thesis.
Every thesis has predefined review and exit conditions.
Decisions are documented before emotions can interfere.

I have followed this process for the last 6-7 months.

More than anything else, it has given me confidence and clarity. Since adopting this system-based approach, I have made a few decisions that the older version of me would never have made.

One example was Waaree Renewables. I had a large position based on a thesis around orderbook growth, strong margins, multi-year clean energy tailwind, and parent-company backing. When I reviewed the latest results (Q4FY26) against my original thesis, I found deterioration in orderbook strength and cash quality despite strong headline growth numbers.

As a result, I trimmed roughly two-thirds of my position while market sentiment remained positive for a few days afterwards, but they were short-lived. The previous version of me would probably have looked only at revenue growth and profit growth and added more. The stock has since corrected significantly.

Another example was Alpex Solar. At one point, it represented around 35% of my direct equity portfolio. The position size exceeded my own risk framework. I had recognized the problem long before, but greed prevented me from acting. This time, I documented the decision beforehand. If the stock returned to breakeven, I would trim one-third.

When the opportunity arrived, I executed exactly what I had written. The stock has performed well since then, but I have no regrets. I am far more comfortable with my current position size to let it run longer. That was probably the first time I felt the difference between making a good decision and getting a good outcome.

What I think was really happening psychologically:

Identity shift: Investing stopped being a hobby and became a skill I genuinely wanted to develop.

Process over prediction: I became less interested in finding the next winner and more interested in building a repeatable decision-making process.

Self-awareness: Instead of only studying companies, I started studying my own behaviour.

Pre-commitment: Written rules became a way to protect future-me from present-day emotions.

Delayed gratification: I stopped optimizing for exciting outcomes and started optimizing for sustainable returns.

**There might be a few more things that are happening to me psychologically in this new phase that I am not completely aware of right now. Am I losing adaptability because of a system? Am I mistaking the processes I developed for being on the right path? Only time will tell or the season investors can help me identify by replying to this post.

I will keep posting more replies to this thread to document any psychological patterns that I become aware of.**

4 Stages of Every Investor

After introspecting my own journey, I started paying closer attention to how other investors talk about markets, stocks, and decision-making.

I found myself reading discussions across ValuePickr, X, Reddit and investor interviews with a different lens. I wasn’t looking for stock ideas anymore. I was looking for patterns.

The more stories I read, the more I feel that investors tend to move through a few recognizable stages. The details differ. The mistakes differ. The timelines differ. But the underlying patterns often look surprisingly similar.

This framework is obviously imperfect and heavily influenced by my own experiences, but I can’t help seeing traces of it everywhere now.

Stage	Dominant Behaviour	Core Beleif
Initial Excitement	Consumes stock tips, chases themes, overtrades, constantly looks for ideas	Success comes from information
Realisation of Hard Truths	Emotions dominate decisions, conviction disappears during drawdowns, mistakes start accumulating	Information alone doesn’t create returns
Developing Individuality	Builds frameworks, writes theses, creates personal rules, and review systems	Consistency and discipline matter more than stock selection
Experiencing Joy	Focuses on process, clarity, and emotional control	Clarity creates confidence, and confidence creates peace

I currently place myself somewhere in Stage 3. I still feel temptation. I still feel FOMO. I still find myself attracted to hot ideas. The difference is that I now have systems that prevent those emotions from becoming actions.

The moment I started thinking about investing in stages, I found myself unconsciously placing investors into one stage or another. Some investors are full of enthusiasm and constantly searching for the next stock tip. Some have already experienced painful lessons and have become cautious. Some are deep into frameworks, mental models, and process building.

And then there are a few investors who appear to have reached a different level altogether. The successful investors we often see on ValuePickr, interviews, podcasts, and books seem to genuinely enjoy the craft itself. Many of them no longer appear obsessed with finding the next winner. Instead, they seem fascinated by learning, teaching, and continuously refining their thinking.

Whether that is Stage 4 or something beyond it, I don’t know.

But it is a stage I find myself aspiring towards.

Conclusion

I have done my best to make this write-up useful by pointing out behaviours, patterns, and mental traps that have shaped my own investing journey.

I have always been fascinated by psychology and behavioural patterns, which naturally makes me view investing through that lens as well. Many people say that investing is more about discipline and psychology than intelligence.

My personal observation has been that while we discuss businesses, sectors, valuations, and financial statements extensively, we spend surprisingly little time discussing the internal battles that shape our decisions.

Looking back, I don’t think the market’s biggest lessons for me came from annual reports, earnings calls, or stock screens. The market exposed parts of my personality that I didn’t know existed. My need for validation. My fear of being wrong. My tendency to confuse activity with progress. My susceptibility to FOMO. My habit of borrowing conviction from others. My struggle to separate good decisions from good outcomes.

Every market cycle seemed to reveal a different version of me. And in hindsight, those lessons have been more valuable than many of the investing lessons themselves.

With that, I would love to hear stories from others. Especially those who are still somewhere in the middle of their own transformation.

What did your journey look like?
What beliefs did you have to abandon?
What mistakes changed how you think?
What behaviours kept showing up repeatedly?
What mental traps took you the longest to recognize?
What version of yourself did the market expose?

There is no particular format we need to follow. The only request I would make is this:

Try to look beyond the stocks themselves.
Try to look at the personal self making the decisions.

If this thread succeeds, I hope it becomes less about stock picks and more about self-reflection & investor psychology.

The market teaches us about businesses. But it also teaches us about ourselves. And I suspect many of the most important lessons live there.

vikas_chandrawat · June 17, 2026, 3:41pm

Is this loss aversion, recency bias, or something else?

Introduction

These days, I am quite enjoying my investment activities. They are more based on research, existing company tracking, and questioning my own systems. In my current stage 3 as an investor, I am obsessed with structured thinking, self-awareness, and being evidence-driven.

A couple of the feedback that stuck with me made me think if I am getting all too comfortable and there are issues that I will only identify in hindsight.

One seasoned investor told me that the stages are fine, but they are not linear, especially the last 2. He says that the market humbles everybody, and in the rough phases, people can move from stage 4 to stage 3, back and forth.

Another guy, again a seasoned investor, said that there is another stage, which either could be a sub-stage of stage 3 or comes just before stage 3. This is where the investor becomes a collector of frameworks. The investor would read many books, see many videos, adapt many frameworks, etc.

This is not necessarily bad and is probably a prerequisite before someone discovers their own process. Most individual frameworks are simply existing ideas adapted to fit one’s personality and temperament.

These conversations made me think more about where I am.

In the above transformation essay that I wrote, I made it sound like the destination has been reached. But that is far from reality. I am definitely better off than I was 8-10 months ago, but I constantly seem to be influenced by fear of loss and anchoring on my average buy price. And the point is not getting rid of these biases because that’s probably impossible, but to be more self-aware, and catch them early, as I think more often than not they will reveal themselves to you only in hindsight.

Fearing valuations and average buying price

When I finalized a system for myself, I made a few rules. One of them was:

“I will not buy a stock in a single tranche to avoid overallocating at a bad price.”

The rule came to fruition because I burnt my hands in mid-2024 market euphoria, where my ignorance made me invest high chunks of capital in some stocks at peak prices. Some of these stocks were ABB, Techno Electric, etc.

And it was not totally random. I was not yet writing a thesis before buying, but I was doing some research to align the investments with strong macro tailwinds. Here, the tailwinds were electrification, energy transition, and data-centre buildout. Both stocks aligned very strongly.

My investments incurred losses, and only a couple of months back, these stocks crossed the price I paid for them. But alas, I had already booked them out completely in my cleanup exercise 6-7 months ago when I decided to only invest in 8-10 stocks and keep the rest of my capital in index funds, gold, and mutual funds.

Now, driven by this rule and the fact that I burnt my hands at peak valuation, I have become very wary about valuations. Valuations, I think, are a tricky thing, at least for me, because I don’t feel confident concluding whether a stock is a bargain or fairly valued. Sometimes high-growth stocks also put my valuation logic to the question. I think they are expensive, but I lack confidence in my own conclusion.

This makes the tranching rule extremely important and almost a lifesaver for me.

Recently, I followed the tranching rule and bought shares of Kalyan Jewellers and TCS (customary disclaimer: not a buy/sell recommendation).

TCS, I haven’t yet decided if I want to make it one of my 8-10 portfolio positions, so the current position is merely a tracking one. Even when it is a tracking position, and my buy-side thesis and conviction haven’t been fully developed yet, I couldn’t help but feel FOMO when it went up 6-7% from my ABP. Now, it is 4-5% down from my ABP, and only this price action – which I decided not to base my actions on – is providing me some relief from the regret of under-allocation.

The funny thing is that I haven’t even decided whether TCS deserves a place in my portfolio. Yet I felt regret when it went up. And relief when it came back down. The stock itself hadn’t changed. My thesis hasn’t changed and is under test before I decide if this is a position worth building up. Only the price had changed. Yet my emotions changed dramatically.

Now, we come to a stronger position, and that is Kalyan. For Kalyan, I have developed enough conviction to make a concentrated bet. Valuation-wise, I can’t confidently say if it’s a bargain, but I can do comparisons. Historically and relative to peers, it seems to be trading at a reasonable price in my opinion. And hence, I made the trade. I followed the rule and started taking tranches. I made 2-3 tranches, and still, I have only taken about one-third of the position I would ideally like to have.

Only a couple of days back, Kalyan ran 10% in a single day. And more than happiness, I was marred with regret about why I didn’t make a larger tranche. What’s interesting is that if Kalyan had fallen 10% instead of rising 10%, I would probably have been grateful that I followed the tranching rule.

The same decision is being judged differently purely because of the outcome.

What I think is really happening psychologically

Regret minimization: A large part of my process is designed to reduce future regret. The tranching rule protects me from the regret of overallocating at a bad price. But when the stock runs up, it creates a different regret: under-allocation.

The illusion of control: Previously, it was spreadsheets and Google Docs. This time it is the rules and process. I can see myself still being driven by stock prices. The rules are protecting me from taking actions, but they are not eliminating the emotions underneath.

Recency bias: I see that recent instances are making me question a good rule that, when I created it, was created after much deeper reflection and analysis. I created the rule with full acceptance that it could result in under-allocation at good prices. Yet a few recent examples are making me forget that trade-off.

Loss aversion: Because I erred greatly on the valuation front, it is stopping me from committing aggressively even when my preparation today is much stronger. My prep is much stronger than the time when I made the mistake, but my fear is stopping me from acknowledging that fact and acting on the new information. In some sense, my entry decisions are being made for the investor I was and not the investor I am.

Conclusion

For this, I don’t have a solid conclusion yet. As I mentioned before, maybe it’s only in hindsight that you get clarity on what was really happening. I realize there’s a lot of conflict in what I wrote in the psychological section, but that’s my ground reality as of now.

I am in conflict and trying to navigate it without making emotional decisions.

The one thing that is a rock-solid conclusion, at least for me, is that having rules and a process is a must. Even imperfect or flawed ones. Because that’s the way towards becoming an intelligent investor: evidence-driven, self-aware, and capable of thinking independently.

The imperfect rules and processes provide structured data points that reveal where improvements are needed and where the actual problems lie. The same analysis can be done without structure, as I did 8-10 months ago, but there I had to make lots of guesses about my psyche and patterns. Now, I know exactly the patterns. The job is to determine whether they are moving in the right direction or the wrong one.

One advantage of documenting these conflicts publicly is that other investors can sometimes spot patterns that remain invisible to us. I may only recognize today’s mistakes six months later. Someone reading this might recognize them immediately. That’s the real reason I wanted to write this update. Not because I have answers, but because I suspect I’m missing something.

If you’ve dealt with a similar conflict between process and price action, I’d genuinely love to hear how you thought about it.

gsapte · June 17, 2026, 4:38pm

This always happens with some investors even after 15+ years of an experience in stock investing.

When the prices are going up, an investor becomes a long term investor.

When prices are going down, risk aversion kicks in and an investor starts thinking short term i.e. closing the losing position as soon as it is positive. (Generally averaging down helps in such cases if you have conviction in the business).

There is no simple solution to this behavior.

Only solution is to stick to the process irrespective of its outcome.

I also buy in small tranches after realizing that, Market do not respect your views at all. If you believe that stock is undervalued, Market can still punish it down, and vice-a-versa.

Having a sound process of allocation, sticking to it in bad & good market conditions, minimizing your risk by reducing overvalued position from time to time, and even increasing the position back if you are still holding the stock, sometimes can help.

This is based on my own experience. (Note: You will still make mistakes but those will be mostly controlled mistakes and negative impact on stock portfolio could be low. Also, staying away from the stocks having poor corporate governance track record is essential. There are some known corporate groups in India, in this poor corporate governance category for many years, and you should avoid those even if all your friends are buying their stocks!!).

rk1771 · June 18, 2026, 2:38am

Your investment journey and your understanding, which you have acquired in a short span of 5 years is not only commendable, it is rare.

There are numerous path to success in stock market, it is just that you have to find your own. All successful investors have developed their own path, a path which aligns with their nature and inner individuality. You can tread on a path for long periods of time only when it is aligned to your nature. That is why borrowed wisdom don’t work in stock market.

The path, we also call investing framework, can be developed if you start asking “why”. You want to buy something, ask why; want to sell, ask why; don’t want to buy, ask why…. Ask why before you take any decision in stock market. The process may not improve your investment decisions but you will improved after every decision. That is the real game of stock market- improving yourself with every decision. Let me guarantee you something- “Returns will follow, to an extent you cannot imagine today”.

Enjoy.

vikas_chandrawat · June 18, 2026, 6:56am

Thank you so much sharing your thoughts and advice.

It really helps to know even the experienced investor goes through such conflicts. What really stood out for me in your entire response was: “Market do not respect your views at all. If you believe that stock is undervalued, Market can still punish it down, and vice-a-versa.” This is gold.

It also helped to know the right way is to follow processes in good and bad time both. But this gave rise to another conflict in my mind that I would love to get your views on:

“When you’re following a process and process is something that will continuously evolve with you, how do you know this is the time to change some of the rules or processes? I mean there got to be some balance to it or else we might end up being too rigid following a flawed rule for too long or we might end up making too many changes with too little data”

vikas_chandrawat · June 18, 2026, 7:05am

Thank you Rajesh for the kind words.

I am someone who is more driven by reasoning than by exact solutions. And your philosophy to ask “Why” every time we make a decision is something that I feel will go a long way with me. I guess in some sense I asked why, and that’s why I am following a process which was not there previously. But that “why“ wasn’t conscious and explicit. You just made it explicit and conscious for me.

I can see myself using it all the time from now on. Thank you very much for sharing such a simple yet thought-provoking question/framework. I don’t know where, but I have read that the best way to learn is to ask questions, not answers.

Also, this makes my mouth water : Let me guarantee you something- “Returns will follow, to an extent you cannot imagine today”.

abhiwhy · June 20, 2026, 9:48am

Your transformation reminds me of this quote:

Expertise is built by going

from unconscious incompetence,

to conscious incompetence,

to conscious competence, to finally

Unconscious competence.

Kudos to the evolution.

vikas_chandrawat · June 20, 2026, 10:25am

Thanks Abhi, the transformation has barely scratched the surface so far. I love the quote. I am going to steal it and write an article inspired by this. It makes me think of how intuitions are built over time. I was reading “thinking fast and slow” and it had an example where an experienced firefighter was with his team combatting a fire in the kitchen of a house. Suddenly he felt extreme heat on his ears and started shouting get out to the team without realising why. They all got it and the next moment the kitchen floor collapsed.

Looking back the firefighter analysed that the fire felt unusually quiet and hot, his mind couldn’t comprehend consciously but his body reacted with an intuition that he developed over years of service. The actual fire was underneath the kitchen floor in the basement, without him knowing consciously, his body reacted to the signs presented in the environment around him.

Many such examples in multiple fields. I guess same happens in investing. With time and effort put in understanding the businesses and art of investing, pattern recognition develops and you develop an intuition or like you said unconscious competence.

abhiwhy · June 21, 2026, 2:36am

Agreed.

Earlier I used to take strong promoters as a granted for most businesses. I mean why would you have a public listed company if you’re not good at what you do, right?

But lately, I’ve been realising how rare it is to have strong promoters at the helm, who are good people and have a business in a growing market. It took running my own business, and having faced the market to appreciate that simple insight.

Simranjit_Singh · June 26, 2026, 5:49am

I read this thread in complete, many of my experiences resonate with yours and is insightful. Thanks for bringing in this aspect of transformation, framework and i think some checklist is required at first place to simplify and solidify detailed framework so that atleast basic checks are in place for the company before one does deep dive and apply investment framework on top of it. One very important aspect (sure we are aware and you just touched also at one place in brief, but still i tend to ignore attimes), its ‘state of mind’ at the time of decision making, what i experienced that because state of mind is not at the best , will ignore checklist and will take a call and i met one veteran few days back and he said that this mistake he also did in past though very rarely and obviously results cannot be in our favor then.

vikas_chandrawat · June 27, 2026, 5:50am

How do we know that years of investing are making us wiser rather than merely more confident?

The reply from Abhi on this thread, where he shared a quote, was the start of a thought-chain that has occupied my mind for some time. For reference, this is what he shared:

Expertise is built by going,

from unconscious incompetence to conscious incompetence,

to conscious competence,

to finally unconscious competence.

The simplicity of the quote hides how much it can mean. Since I first came across it, I’ve found myself repeatedly coming back to it, trying to understand what it really implies for investing.

One companion for this rather thought exercise is a book that I am currently reading, “Thinking Fast & Slow by Daniel Kahneman”

At first, my mind connected the concept of intuition I read in the first few pages of the book with this quote. Let me explain with an example:

Similarly, we see many such examples

The nurse who immediately recognizes a patient is critically ill.
Chess masters instantly see good moves.
The firefighter story

Before I go further, I want to share the origin of the quote that Abhi shared. So I found that the quote is not an investing quote, but it’s called “4 stages of competence,” developed by Noel Burch in the 1970s. In investing reference, we can closely map it to the following behaviours:

Unconscious incompetence = a beginner believing investing is sufficient by finding good businesses, low p/e and holding for the long term. He/she doesn’t know the mistakes they are making.
Conscious incompetence = they realize how certain biases and emotional triggers are making their judgments flawed. They are missing aspects like capital allocation, industry structure, and so on.
Conscious competence = They make deliberate efforts to plug the gaps, both behavioural and skill gaps. Like reading annual reports, industry outlook, position sizing, exit discipline, checklists, etc.
Unconscious competence = Over time, those checklists become internalised. An experienced investor quickly spots an incentive mismatch, weak capital allocation, or a deteriorating balance sheet almost instinctively.

What attracted me wasn’t the framework itself, but what the fourth stage represents. Good decisions no longer require deliberate effort; they become almost automatic. That’s exactly what I thought Kahneman’s firefighter example was illustrating.

Naturally, every investor would want to reach this fourth stage. To develop an intuition that quietly notices things we can’t yet articulate consciously. But that immediately raised another question in my mind:

Is spending enough time in the market sufficient to get there?

This question is the crux of this entire post.

I came across two examples that made me question whether time and repetition alone are enough to reach that fourth stage.

Example 1 from the book: Kahneman describes meeting the CIO of a fund who had recently visited a Ford Motors factory. He came back genuinely impressed, saying, “Boy! Do they know how to make cars?” Naturally, he invested in the company.

What surprised Kahneman wasn’t the investment itself, but the reasoning behind it. The CIO made it very clear that he trusted his gut feeling on this one and never asked the question every investor should ask: Was Ford Motors underpriced?

Years later, Kahneman explained this using what he called substitution bias. Faced with a difficult question Is Ford a good investment? the mind quietly substituted it with an easier one: Do I like Ford cars and what I saw at the factory?

Example 2: A seasoned investor once told me that these stages (4 stages of investing in my pilot post on this thread) are not as linear as they appear, especially the last two. The market has a way of humbling everyone. During difficult phases, even experienced investors find themselves moving back from unconscious competence to conscious competence as they re-examine their decisions.

My interpretation is that some of the intuitions they had cultivated worked against them when the environment changed. The rough phase forced them back into conscious thinking, questioning assumptions and rebuilding their mental models before those intuitions could once again become automatic.

So this answers my question (open to other interpretations and explanations) that time and repetition are not enough to cultivate unconscious competence or expert intuition. Perhaps repetition doesn’t always create unconscious competence. Sometimes it merely creates unconscious confidence.

That naturally led me to a follow-up question:

Under what conditions is intuition actually trustworthy?

I hadn’t yet reached that part of the book, so I dug a little deeper and discovered that Kahneman had later explored this very question with psychologist Gary Klein. Initially, they disagreed with each other

Klein had spent years studying firefighters, military commanders, emergency physicians, and people who make excellent intuitive decisions.
Kahneman had spent years studying cognitive biases and overconfidence.

They seemed to be saying opposite things. Eventually, they collaborated and wrote a paper together asking: Under what conditions is intuition trustworthy?

Their conclusion was essentially: Intuition can be remarkably accurate when experts operate in an environment with sufficiently regular patterns and have opportunities to learn those patterns through prolonged practice and feedback.

This now explains both the story, the firefighter, and the CIO.

Firefighter combatted many fires over the years. Every fire gives you clear feedback, like the amount of damage, time to get it under control, etc. Every wrong intuition is corrected immediately with a quick feedback loop.

The CIO example is the opposite; investing doesn’t provide a stable environment, and the feedback loops are noisy, long, and much harder to attribute to the original decision. Even if Ford Motors doubled over the next few years, would that mean the CIO made a good decision, or was he simply fortunate? The answer isn’t nearly as obvious.

This leaves me with a question that I suspect I’ll spend many years trying to answer myself. Perhaps someone more experienced can help shorten that journey.

How do we know that years of investing are making us wiser rather than merely more confident?

For investors who’ve been doing this for 10–20 years, what mechanisms have genuinely improved your judgment? Not your knowledge, but your intuition. Given how delayed and noisy investing feedback is, how did you distinguish between habits that deserved to become automatic and those that only felt right because they had worked a few times?

vikas_chandrawat · June 27, 2026, 5:59am

Hi Simranjit, your point is spot-on. State of mind often influences our decision making, there’s no doubt about it. And that’s why we all end up creating checklists and systems that make the process more mechanical than emotional. What I can share is what helps me to keep my state of mind at bay while taking investment related decisions:

Before buying any companies, my checklists are more internal than external. I have forced myself to write the following things as honestly and clearly as I can:

What specific growth driver am I betting on?
What are the 2-3 measurables that can tell me if that driver is playing out or not.
What will change my mind for this investment: red and yellow flags.

Now, such question for which I am forced to write answers are directed towards my internal checklist like it makes my decision based on my understanding rather than the company quality. Maybe with time it will change but currently I am at stage where I feel my own understanding is the bigger gap than me betting on a fundamentally bad company. Also, such question has made the buying process long for me. It can take days and weeks for me to conduct enough research to finally be able to answer these questions honestly. And, I go back to these answers in my subsequent reviews so this is not write and forget but my entire future decision making of exit, hold depend on these answers. This makes my future decsions like exit, hold quite mechanical where I am more focused on what I wrote and does that still hold vs re-evaluating the company in a different state of mind.

I hope the perspective I shared helps. Happy to hear your thoughts.

Somnath_Patra · June 27, 2026, 7:25am

Hi, I have gone through your threads. Really a good job you done. What you say are almost same for a retail investor. In my initial years I used to do that. Now I try my best to find a quality business at a good valuation. Turned my portfolio a concentrated and aggressive one. Minimized stock to below 10 nos. Portfolio is responding quite good now. This forum also helped me a lot. I love to read most of the genuine articles like yours. It is really encouraging. Still now , my mutual fund portfolio is giving better results than my stock portfolio. But I am trying my best to turn it good also. Still gathering knowledge from co investors. Please keep it up. Again, thanks for a nice threads.

vikas_chandrawat · July 15, 2026, 10:11am

When the Advice You Agree With Is the Most Dangerous Kind

"To hold long or to cut short”

These were the words that had grappled with my mind for the longest time.

In early 2022, I came across Warren Buffett’s line: “Our favorite holding period is forever.” It landed with a kind of relief. I had just started building my portfolio, and the idea that patience was the entire game gave me permission to stop second-guessing every red day. I was a long-term investor. I was doing it right.

A few months later, I read something that should have unsettled me. Howard Marks had said, "Avoid your losers and winners will take care of themselves”. Even Buffett himself had sold dozens of positions over the decades. Airlines. IBM. Wells Fargo after holding it for over thirty years.

Two streams of advice from the same lineage. One said hold forever. The other said cut early. At a surface level, they appeared contradictory.

Here is the part that still bothers me when I think about it: my first reaction was not confusion. It was selection. Without realizing it, I mentally shelved the “cut your losers” advice and kept the “hold forever” advice close. The latter confirmed what I was already doing, nothing. The former would have required me to examine my portfolio and admit I had no framework for deciding what to keep and what to let go.

The contradiction did not fully register until years later when I finally decided to build frameworks and systematic ways to approach investing. I went back and looked at the actual businesses Buffett had held forever. Coca-Cola. American Express. GEICO. These were not just any businesses. They were mature compounders with durable consumer demand that could handle economic cycle with strength. People drink Coke in a recession. They still insure their cars. The business itself was doing the compounding. The investor’s job was to not interrupt it.

Then I looked at the businesses where the same investors applied the opposite rule. Cyclicals that were near the peak. Turnarounds where the thesis had broken. Commodity plays where the cycle had turned. In each case, “cut your losers” was not a contradiction of “hold forever.” It was the correct rule for a different category of business.

The advice was never the problem. I had been consuming conclusions without asking the one question that would have saved me years of confusion: Why did they say this?

That question — “why” — turned out to be the real discovery which I didn’t grasp consciously until RK pointed out few weeks ago in one of the replies above. Not business classification, though I stumbled into that as a byproduct. The actual habit I needed to build was the reflex to pause when I encountered advice, especially advice that felt good, and ask what was behind it.

What I think was really happening psychologically:

Confirmation bias dressed as learning: When we encounter advice that flatters our existing behavior, we treat it as validation. “Hold forever” told me I was already doing the right thing. I stopped thinking. The feeling of learning was actually the feeling of being reassured.

The comfort of borrowed wisdom: Questioning advice is work. It requires thinking about why this was said, sometimes little bit of digging into the experiences that shaped that advice. It is far easier to accept the conclusion and move on.

The advice that feels worst might be the one you need most: “Cut your losers” was uncomfortable because it implied I had made mistakes. “Hold forever” was comfortable because it implied I just needed to be patient. The discomfort was pointing directly at the gap in my process. I ignored it.

This applies well beyond the two Buffett quotes. It applies to every stock idea that arrives fully formed from a Twitter thread. Every conviction someone else built and handed to me. Every rule of thumb that sounds right but was designed for a context I have not checked.

I still catch myself slipping. A well-phrased insight from an investor I respect still lands with a small internal nod. The difference now is that I notice the nod. I notice it, and I ask the question “Why they said or believe it?” before I let the insight settle.

Quoting the wisdom shared from RK for reference. This right below is one of the best fundamental technique to improve not just as an investor but as a learner in any field.

vikas_chandrawat · August 14, 2026, 4:18am

It’s been quite some time when I last wrote on this thread. I had been busy with making changes to my micro-products. Result season is in full swing, so it had also kept me busy. I have been curious about coming up with some mental models or framework about the fundamental thing or the most time-taking activity we do as investors i.e. reading/researching. I plan to share what I found out about this particular investing behaviour. This is not a conclusion and more like “thinking out loud in public” so please take everything with a pinch of salt and feel free to push-back and contribute on the discussion.

Your research is as good as the quality of your questions.

When I first began fantasizing about what serious investing would look, always reading/researching would come to my mind.

So when I got serious about investing that’s what I started doing. I would read the concall transcripts, go through investor presentations and try to browse around the annual reports. I would put generic prompts in Chatgpt like “how is the management, how are competitors etc.” and get generic responses that I will just load up in my memory.

Now, all this is not a waste. I think this is a must first step but this can’t be all we do. Reason is that there are a few psychological aspects of our brain which makes this only little useful.

Psychological aspects:

Myth of fluency: There is a phenomenon where whatever we read, if it reads easily we think we understand it. But it’s quite the opposite. We understand the things that we struggle to comprehend and have to read a few times just to parse. So reading about a business from some structured document leads us to believe we understand it.
Our lazy system 2: As per Daniel Kahneman, our brain works as 2 systems. System 1 is our intuition, works instantly and is bias-ridden. System 2 is capable of deep thinking, change our beliefs, compute and do effortful tasks but it is inherently lazy, in other term we avoid cognitive strain. Due to this, while consuming long research we skip the things we don’t understand in the first glance.
Associative memory: Many seasoned investors advise to read alot. And in the long run it will genuinely compound our knowledge and maybe a paragraph that we read long time ago will trigger a great idea or an opportunity in the present. All of this is true but it needs to be balanced with present requirements vs setting up for future. At the same time, we need to avoid “availability bias” which makes us belieive the likelihood of things are more certain if related examples come to mind easily.

Rabbitholes I explored:
Recently I came across a Youtube video that talked about an approach for reading books that apparently great minds like Elon Musk, Bill Gates etc. apply to their reading. I liked it and thought to apply it on my investment research.

The approach can be explained by an acronym called ACTOR.

A = Aim, always ask what’s the objective of this particular reading. Even if there is no objective, then consciously accepting that also is a good habit.

C = Compress, we have always heard and experienced how taking short-hand notes improve the chances of retaining a lesson. This is exactly that, instead of just nodding along, it’s better to write a short note or just reiterating the lesson in our own internal voice on what we consumed.

T = Test, this is very important. Essentially, here the video asked us to specially focus and search for things that we don’t naturally believe in and ask why we don’t beleive easily in this, what base beliefs are making it hard for me to accept this opposing views, what’s the view of the author which is different then mine leading to this conclusion. It also applies to things that we believe in. Instead of an internal nod, ask why you believe this, be your own skeptic.

O = Own, this is basically reiterating the things we learn. When my wife is reading something, she would tell me what she read in enormous details and then I would ask her how many pages she has read and it would be like “I read 1 chapter”. And this would baffle me, like how can she reiterate everything in so much detail. She was owning the things she read. It can be done by teaching out loud even to yourself. It is like planting the seed of wisdom we came across in our own mind.

R = Run, It simply means actually practise what you read.

2 Kinds of Research

I understand that not all investment research can be aim-oriented as demanded by the ACTOR framework because that would stop us to learn truly new things which is often the case with investment research given the breadth of space like sectors, industries, companies across value-chain, different business models and so on. So there needs a balance; 60-75% open-ended & 25-40% targeted (no maths in this, just my personal take).

I studied a few research & learning methodologies and 2 struck me. One is called “Syntopical reading” & other is “Richard Feynman’s 12 Questions”

“Synoptical Reading”
This was developed by Mortimer Adler in his book "How to Read a Book” where he defined levels of reading; Synoptical being the top-most.
What it requires of a reader or a learner is to collate a list of various sources written on a singular topic. Normalize the language of those various sources so you can read past the different jargons to describing a same concept. Compare notes across these different sources and then finally form a conclusion.

It turns reading into an active investigation. In investing these could be targeted questions on a company like “How will they achieve a margin expansion?” or “Why are their orderbook replenishment pace slowing down?”. Here, the sources are investor ppt. , concalls, competitor concalls, emailing the investor relations team. Every one of these sources have different stakeholders with a slight difference in their intention & incentives. I think we unconsciously practice it every day we are reading about a company.

“Richard Feynman’s 12 Questions”
Feynman was famous for grasping complex concepts easily. His trick was, he used to have 12 open questions in his mind at all times. Whenever he comes across any new trick or concept, he would run it by his list of 12 open questions to see if the new information resolve any of his open questions. Sometimes, it did and he would come across as genius and indeed he was one.

We can apply the same for the open-ended research or reading we do. We can have a set of open-ended and unresolved questions in our mind (not necessarily 12) and then every random reading can actually tie back to something we are uncertain about, be it sectors we wanna understand better or the portfolio companies.

How I plan to apply:
The rabbit holes I explored, all boiled down to the fundamental concept of having questions in your mind. So that’s exactly what I am going to do actively rather than passively. I already write specific claims on companies I invest in. Every observation must answer if it strengthen the claim or weaken it. But many observations produces more unresolved questions. I plan to have my unresolved questions both at company level and overall.

I think, in some ways we all apply these 2 research methodologies, only not in a very conscious ways. And this topic makes me extremely curious about how people read or research. Nobody talks about that, people suggest what to read, how much to read, etc., but never how to actually read so the reading is effective. I would love to hear what others have to say about their own methods; conscious or unconscious.

vikas_chandrawat · September 2, 2026, 1:51pm

Outcome bias or Hindsight bias

It is a deadly disease we all suffer from.

Daniel Kahneman conducted many studies, and what he found was profound. People change their beliefs so much after an event that they can’t even recall what they believed before.

For investors, this would look something like this: Person A believed that US tariffs would hurt Company X, and there is no chance the tariff stance will change anytime soon. Later, the tariffs were eased in the next 2 months, and Company X did great. Now Person A says it was inevitable for the tariffs to be eased off because the products Company X sells have high demand that can’t be met from anywhere else, so the US had no option but to ease off tariffs. And this person claims that he believed the same thing when the tariff situation was bad.

Here, the outcome bias not only changes one’s beliefs but also makes one forget what they believed before. And hence, it is one of the deadly diseases that our mind inherently suffers from. There is no escape from this. Person A wasn’t dumb; we all do this in our everyday life.

The only preventive measure one can take is to make sure to capture their thoughts that influence important events like an investment decision. This can help one become more self-aware, and in investing, being self-aware can be a great psychological edge.

Would love to hear thoughts and opinions from other investors :)