A “secret sauce” of a successful investor

Today, I have spotted in Google Inbox the bait from Medium “Fight Back Against The Financial Industry By Learning How To Invest Like A Legend” that pointed to the article “An Investment Portfolio That Has Gained 28% in the Last 12 Months (and how you can copy it)”.

The author makes a statement that he had found an investment philosophy, which helped him to get a 28% ROI for his portfolio. As usual, he references to Warren Buffet, who is widely recognized as the greatest stock market investor. Then the author compares his performance with an average investor with 4% return per year, S&P 500 with 10% and the best investors with 20-30% over a period of decades. In his wishful thread of thinking he agrees that a “slightly” smaller ROI of 23% will make him about $7M in the horizon of 20 years. Sure, everyone can share his success by copying his investments decisions for a small price of $100 subscription fee per year.

I will not call him a cheater because he probably believes in his investment strategy. However, correlation is not causation, and will show you the example of somewhat random decisions, which led to similar results.

How we became investors

At the beginning of 2015, we got a very good job offer, and were working in Paris and looking for a permanent apartment in Paris. Our relocation agent and friend organized the visit to the new and fully furnished apartment in 17th district of Paris. We liked it so much, but the representative of the owner insisted on the bank guarantee. It means that the bank locks 6-12 months of the rent payments on your account to protect the interest of an apartment owner in case if you are not able to pay. However, we didn’t know the consequences of this decision because the bank doesn’t simply lock your funds. The bank sells you bonds and locks your investment account instead. So, we became investors without planning.

This was our first random investment step.

How we found out that we are able to invest

We have accounts in our native country and we didn’t spend much from our French account. So, our account manager contacted us and proposed to invest our extra money into some investment fund. At that moment, we found that we have a full-fledged investment account and we can buy bonds, stocks, etc. The process of thinking took about one month or more, but finally at the end of March 2015 we bought our first stocks Google and Netflix.

This was our second random investment step.

How we made our best investments in 2016

During Spring and Summer 2016 both Google and Netflix didn’t show any substantial growth and we had no plans to invest more. August 2016 brought us a new job offer, but this time in California. We went to the bank and asked our manager about possible issues of moving from France and found that U.S. residents can’t access investments accounts in France. Since we had even more extra money, we decided to buy more stocks even with mediocre growth before leaving France. So, we bought more Google and Netflix, and bought several other stocks.

This was our third random investment step.

How we found out that we made good investments

We decided that lifestyle in Europe is preferable for us. After getting back the access to our investment account we saw a similar 28% or so growth of our investments.

Do I think that we are successful investors, which can help you to get rich? Not at all!

We made decisions because we had to make them at that moment of time. We read news and reviews of companies and industry forecasts, which could be correct or not. Only time could prove what is right or wrong. The truth is that informational technology and healthcare markets in U.S. were growing in 2016 and continue to grow in 2017. This “bullish” trend is the only “secret sauce” of many “successful” investors.

What to do next

Obviously, I will not subscribe and follow someone’s strategy. Why not? Because I have a good chance to lose more than $100 by following without a sound investment experience. Instead, I will learn more about economics, markets, investments, etc. So, if you have good resource links, please feel free to share.