Jul 10, 2026
Lately, I've been getting this powerful feeling that everything I touch turns to gold. Every time I buy a stock, it goes up. Did I finally figure out the stock market game? Did I find a secret way to follow Will Rogers' advice: Buy stocks that go up, and if they don't go up, don't buy them?
No. I didn't get much smarter. I was simply a willing participant in the latest cyclical bull market. A bull market makes you feel smarter than you are, the same way a bear market makes you feel dumber than you are.
This piece is a small excerpt from my first book, Active Value Investing (2007), which I later rewrote into The Little Book of Sideways Markets. I still stand by every word, but the older, more mature Vitaliy has some additional thoughts to share at the end.
I walk through why feeling smart makes you do the opposite of what you should be doing, and my favorite trick for reminding myself how dumb I am (it involves pulling out an old annual report on a stock I lost a boatload of money in). I discuss the four-letter word R-I-S-K, the "buy and forget to sell" investor a bull market quietly creates, and why every sell looks dumb in the moment. I talk about selling discipline, valuation targets, and why my objective is never to buy at the bottom or sell at the top.
In the additional thoughts, I get into the discomfort of making rational decisions against the grain of the tribe, and what evolutionary programming has to do with it.
The full piece is at investor.fm.
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Active
Value Investing - https://amzn.to/3u8zn3A
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WHO AM I: Vitaliy Katsenelson is the CEO of Investment Management
Associates (IMA) and an award-winning writer. Forbes Magazine
called him "The New Benjamin Graham." His work has appeared in the
Financial Times, The Wall Street Journal, Barron's, Fortune,
Institutional Investor, and Foreign Policy. He is the author of
three books, including Soul in the Game: The Art of a Meaningful
Life. _________________________________________________________
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