Conviction Separates Investors

Suleman Ali shares insights about investment psychology, particularly through the lens of his father's real estate investments during the 2008 financial crisis. He contrasts this with his own hesitation in various investment opportunities, highlighting the difference between conviction-based investing and emotional decision-making.

Key Points:

• Investment Psychology During Market Downturns:

  • His father bought Florida real estate at "25¢ on the dollar" during 2008 crash
  • When property values dropped 50% further, instead of panicking, his father bought more
  • Continued buying throughout the downturn and even as prices started recovering
  • Result: Family now owns approximately 100 single-family rentals in Florida

• Psychological Barriers in Investment:

  • Missed major opportunities like Coinbase's early rounds due to skepticism
  • Passed on Facebook stock in private markets despite recognizing the opportunity
  • Currently sitting on $40-50M in T-bills, waiting for "perfect" entry points that never come
  • Acknowledges missing S&P 500 entry point at 36,100 while waiting for 35,100

• Differentiating Between Gambling and Investing:

  • Key difference is the psychology going in
  • True investors say: "I know this is gonna go down, I don't care because I know I can wait 5 years or 10 years"
  • Focus on fundamental values: "This is below replacement cost"
  • Long-term conviction separates investment from speculation

• Learning From Investment Mistakes:

  • Paid $75,000 to back out of Facebook stock purchase
  • Helped friend buy Facebook stock instead, which turned into $8M
  • Recognizes pattern of overthinking and missing opportunities due to perfectionism
  • Values long-term conviction over short-term price movements