How to Update Your Investment Process (w/ Dr. Gio Valiante)

TL;DR

It is important to be mentally flexible and adaptable in your investment process, but also to stick to principles. A good process involves evaluating why it isn't working and making incremental changes while managing risk.

Transcript

MAX WIETHE: When do you reevaluate your process, or when do you stick to your guns and say, I'm right, and they're being irrational. In the face of what appears to be a rationality, how do you judge your own process? GIO VALIANTE: That's another great question. One of the things I always say is write your process in pencil, not in Sharpie. Because ... Read More

Key Insights

• ✏️ Process in investing should be adaptable and flexible, written in pencil rather than Sharpie.
• 🖤 When evaluating your process, consider whether the lack of success is a temporary market condition or a need for a different approach.
• 🎮 Playing someone else's game in investing can result in significant risks and should be avoided.
• 🤗 Staying true to your strengths and skills is crucial, while also being open to evolving and reinventing yourself.
• 💱 Seeking advice and guidance from trusted coaches or colleagues can help during the process of change.
• 👶 Incremental changes and gradual adjustments are recommended when exploring new investment strategies.
• 💄 Managing risk is essential when making significant changes to your investment process.

Questions & Answers

Q: When should you reevaluate your investment process?

Evaluating your process should be an ongoing practice. It is crucial to be mentally nimble and open to change. However, sticking to core principles while making incremental adjustments is important.

Q: How do you know when it's time to change your investment process?

If your strategy consistently underperforms or doesn't align with the current market conditions, it may be time to consider a change. Evaluating the reasons behind the lack of success and seeking advice from trusted colleagues or coaches is essential.

Q: What are the risks of playing someone else's game in investing?

Trying to adopt a strategy that is not familiar to you can lead to catastrophic results. It is important to stay true to your own strengths and skills, rather than following trends or strategies that are outside of your expertise.

Q: How should you approach making changes to your investment process?

Gradual changes and incremental adjustments are recommended when venturing into new strategies or styles. It is important not to go all-in with significant amounts of capital, but rather start small and learn while managing risk.

Summary & Key Takeaways

• Having a flexible mindset is crucial in evaluating and adapting your investment process.

• Process should be written in pencil, not Sharpie, allowing for necessary changes while staying true to core principles.

• When a process doesn't work, it is essential to ask why and consider if it's a matter of time or a need for a different approach.