John Wright discusses successful investing in individual equities
Listen to the interview on the Business Innovators Radio Network: Interview with John Wright, CFA Chief Investment Officer of Stellar Assets Discussing Investing in Individual Equities
In this episode of Influential Entrepreneurs, host Mike Saunders welcomes John Wright, Chief Investment Officer of Stellar Assets, to discuss essential rules for investing in individual equities. John shares his unique background, transitioning from a career in Fortune 500 companies to becoming a successful investor. He explains how his problem-solving skills and passion for investing led him to achieve remarkable 30%/yr. returns in his retirement account for 10 years, prompting him to consider a career in investment management.
Successful investing in the stock market transcends merely possessing the right information or strategies; it demands a profound understanding of both oneself and the dynamics of the market. John identifies three critical components that contribute to successful investing: bravery, sound principles, and discipline. These elements work in concert to help investors overcome emotional biases and make informed decisions.
Bravery in investing embodies the courage to act contrary to one’s instincts and emotions. Many investors find themselves paralyzed by fear, particularly during market downturns or periods of uncertainty. Wright emphasizes that overcoming this fear is essential for making sound investment decisions. For instance, when a stock’s price declines, the instinctual reaction may be to sell and cut losses. However, a brave investor recognizes that the stock remains fundamentally sound and he may choose to double down, viewing the drop as an opportunity rather than a setback.
Wright’s personal investing philosophy exemplifies this bravery. He is willing to take calculated risks, such as investing in options, because he possesses the confidence to act decisively. This bravery enables him to navigate the complexities of the market without being swayed by fear or panic.
Having the right principles is crucial for guiding investment decisions. John’s book, “You Know Nothing About Picking Stocks… and That’s OK!”[Available on Amazon], outlines ten principles that serve as a framework for do-it-yourself investors. These principles enhance investors’ understanding of the market and help them identify what constitutes a good investment. For example, one key principle is to always assess whether people would buy a stock at its current price. If the answer is yes, it may be worth considering increasing their investment.
Wright also underscores the importance of humility in investing. He notes that a little knowledge can be dangerous, and investors must remain skeptical of their assumptions. This humility allows investors to stay open to new information and adjust their strategies accordingly, rather than becoming overconfident in their decisions.
Discipline is the third pillar of successful investing. It involves adhering to a well-defined investment strategy and resisting the temptation to make impulsive decisions based on emotions or market noise. Wright points out that many investors fall into the trap of chasing hot stock tips or making trades based on fleeting market trends. Instead, disciplined investors stick to their principles and strategies, even amid market volatility.
Wright also emphasizes that having a clear set of rules and metrics can help maintain discipline. For instance, he employs a ranking system based on various models to identify potential investments. This systematic approach allows him to make decisions based on data rather than emotions, which is crucial for long-term success.
John also shared: “Crash protect assets without sacrificing performance” and “Actively managed equity & option portfolios targeting higher returns AND lower downside risk.”
Video Link: https://www.youtube.com/embed/0vgnaUhnAOI
About John Wright
John is a Stanford guy (MBA ’95), but not Wall Street. He has spent his entire career in the real world solving the biggest problems facing the largest companies. Problems like how to win, grow sales, and improve the stock price. He has driven value across diverse industries: Consulting, Technology, Industrial, Retail, and Transportation. But he no longer works for McKinsey, HP, Exxon, AutoZone, or GM.
And he applies that problem-solving, creativity, and corporate background to decide how to best invest the assets. It would be his honor, if people would consider him as their money manager.
On a personal note, he is married with 3 children. He is the 7th of 9 children in an extended family where everyone still gets along. They were raised by faithful parents who taught strong values, including that they are all part of a greater family of brothers and sisters. He served a 2-year full-time mission in the Netherlands & Belgium to help share that message.
Learn more about John Wright and Stellar Assets at: www.stellar-assets.com
Any investment program may be volatile and can involve significant loss of principal. Option accounts have large monthly variations and are suitable for risk-tolerant investors. Results are unweighted averages based on a limited number of accounts, are unaudited, and reflect pretax returns net of fees. Past performance is not a reliable indicator of future results. Individual results will vary. Equity-only accounts are available for investors with lower risk tolerance and capacity.
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