John Polomny

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About

My name is John Polomny and I am 51 years old. I am married and live in Texas. I am basically a regular guy. I am in the energy business and have operated and constructed power plants all over the United States and all over the world.

I have spent the last 30 years as an investor and up until fifteen years ago my results were hit and miss. I got tired of going through my tax return at the end of year and realizing that I had another year where I lost money or barely made any money.

Oh yes there were times when I hit a big return. However, I now realize that was based more on luck than any skill on my part. After another year of subpar returns I finally sat down and began actually analyzing my trades.

What I found was not good. I had stocks in my portfolio that I could not recall the reason why I had bought it in the first place. I had stocks that were down 50 or 75% and that I had let fossilize in my brokerage account.

I had no investment plan, no risk control, and basically was shooting from the hip. I was winging it, I was the classic retail investor getting the low returns the “average” investor normally gets. Does this sound familiar? Is this you?

What I finally figured out was I was not investing I was gambling. I would have been far better off just dollar cost averaging into a low cost index fund like the ones offered by Vanguard.
I realized that if I did not change the way I was approaching investing than I would never reach my financial goals.

The first thing I did was clean all the dead wood out of my portfolio. If I had a big loss I resolved to admit my mistake and sell the position. I then systematically went through the portfolio and wrote down the reason why I owned each stock.

I determined the reasoning behind the purchase of each stock, my expectations for the company, and whether the expectations were being met. If not I sold the stock.

My next step was to then construct an investment plan. I endeavored to understand what I was trying to accomplish, set realistic expectations, put risk control into place, and then execute my plan.

Since that time my performance has drastically changed for the better.
The other important thing I have done is study the best investors to determine their success formulas. Here are some of the more important pieces of advice I have learned and that helped in my success.

1.) You are either a contrarian or a victim
2.) The first rule of investing is not to lose money; the second rule is to never forget the first rule.
3.) The price paid for a security usually determines the return over time.
4.) Read 200 pages a day (continuous education) the man with the best information usually wins.
5.) Take the best ideas from others. No need to reinvent the wheel, no one is that smart.
6.) You must have an investment plan. It does not need to be a 30 page term paper. Just a one page summary of what you are trying to accomplish and some rules you will follow (risk control, position sizing, etc..).

I have been blogging off and on for ten years but I have finally decided to take it seriously. I created my blog so I would have a place to write down and clarify my thoughts. Along the way I have learned quite a bit and it has resulted in my performance vastly improving.

I hope you can take some ideas away from my writing that you can find useful in your own investment journey. If nothing else I believe I can introduce you to some investment ideas and speculations that you may not have considered.


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