Wise & Wealthy: The Stoic mindset and contrarian investing

Welcome to Wise & Wealthy: A weekly newsletter full of proven ideas to become smarter and wealthier. I send this every Monday.

#124 – May 13, 2024

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Wise: The Stoic Mindset

I’ve been writing about the philosophy of Stoicism since 2015. A Stoic mindset has truly changed the way I do everything.

I apply Stoicism to my happiness, work, finances, and even relationships. This Stoic mindset allowed me to leverage ancient lessons into my entire life.

The other day I was talking about this change with a friend. He asked me:

“What does the Stoic mindset really mean?”

Let me explain.

Incorporating Stoicism into my daily life is something that I still work on.

Every time I write an article I remind myself: “You don’t control how many people will read it or whether they will like it or not.”

And now that I’m working on the marketing of my next book, The Stoic Path to Wealth, I occasionally catch myself fantasizing about book sales.

Of course, who doesn’t want to do well in their career? But ultimately, it’s not up to us. We can only pour everything into our work, and what happens next is beyond us.

This shift has not only improved my productivity but also the quality of my work. In my personal life, Stoicism also gave me a different perspective.

I always strive to be a positive force in my own life and the people around me. I make sure I always have good intentions. To be a good person. And to wish others the best.

The Stoic Mindset: How to Use Ancient Lessons to Face Life’s Challenges


Wealthy: Going against the herd

Contrarian investing. It’s a term that may stir up images of investors who take unnecessary risks by pumping huge sums into an untested and unproven investment.

Contrarian investors are often mistaken for risk-takers. But that’s not the case. Most people never think about it, but Warren Buffett is also a contrarian investor.

What does contrarian investing even mean? And more importantly, how can you apply its principles to your own investment strategy?

Put simply, contrarian investors go against current market trends. They might buy when others are selling and sell when others are buying.

A good example is the fourth quarter of 2022, the year of The Great Inflation. As the S&P 500 and Nasdaq 100 were in bear market territory, sentiment was negative. Everyone seemed to sell.

Most pundits believed that inflation would stay high and that interest rates would also be high for a long time. But from the start of 2023, we started seeing economic and market conditions improve.

The investors who bought stocks in 2022 were contrarians. The investors who sold were following the herd.

Contrarian investing is based on the belief that herd behavior often leads to overpricing or underpricing of assets, creating profit opportunities.

Contrarian Investing: Make Money by Going Against the Herd


One interesting thing

I just finished reading Scott Young’s new book, Get Better at Anything. The book is about how improvement depends on more than just talent or tenacity. There are three factors that determine how much we learn according to Scott:

  1. See. Most of what we know comes from other people. You can learn from others by reading books or observing their experience.
  2. Do. Mastery requires practice. But not just any practice will do; we have to practice correctly. It’s like performing your exercises at the gym with proper form.
  3. Feedback. Progress requires adjustment. And it helps when we get feedback from others to know what to improve.”

I love this learning framework.


Thanks for reading! I hope you found this edition of Wise & Wealthy useful.

All the best,

Darius

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