Premature Trading Losses

Shaan shares his analysis of his stock trading losses and the key patterns he discovered.

"I went through every single trade again to learn. My prediction going in was that I would have made a little more money if I had done index investing instead. Actually, I would have made a lot more money just doing the index.

I thought I would find that I wasn't as smart as I thought, but in actuality, I only lost money buying in a very small number of stocks - less than 5 stocks. What I bought versus what it currently is was comparable to index returns.

The two situations where I got it wrong were:

1. During COVID, I bought momentum stocks like Zoom. It was working so well that I just bought more. That was stupid.
2. Following random tips from friends - smart friends would say they were doing something, so I bought in.

But all of my actual losses where I made less than I would have in the market was just selling early. I sold a bunch of things when they had more room to run or when market sentiment was down or I was feeling fearful and wanted to move to cash. I actually lost all of my money in the sell, not the buy, which was surprising to me."