Andrei Sota
A bit of background on myself and how I got into the business of investing in the stock market
My adventure in the field of finance started back in 2012, when I was 26 years old and dabbled in a business called agriculture. Me and my partners set up a tomato farm and sold our produce to the local supermarket chains in the country. I soon found out that as the company's main salesman, my job was to discuss quantities and prices a couple of weeks in advance with the supermarket's buyer.
I was meant to anticipate our own production in relation to the market's demand and obtain the highest price possible at a point in the future. Neither me, nor the buyer actually saw the many tonnes of tomatoes that we were trading. We were taking the quality of this produce for granted, while worrying about completely different aspects when we were negotiating our weekly contracts.
I later learned that what I was doing at that company was essentially called Commodity Futures Trading with Physical Delivery. As a farmer, I would have loved to have a way of diversifying my bets in a certain year by buying future deliveries of cucumbers for example, without actually having to produce and deliver actual cucumbers. As it turns out, many farmers before me had faced the same existential dilemma, and as a consequence, advanced economies had developed Exchanges or Trading Venues.
My second serious encounter with finance came when it was time to exit this agriculture business and sell my shares for a price. As I was discussing the price of the sale with my partners, it really surprised me how different our approaches were when determining the value of our business. At play were assumptions about the future, narratives about the company's potential and interpretations of our own balance sheet. The same calculations were made by our counterparty. Essentially, we were trying to make the argument that the future value of our business was far greater than the present price that we were asking for, and as such, we were offering up a real bargain. The bridge that was linking price and value was a story.
And I know one or two things about what makes a good story. As a teenager, I always dreamed about making movies. I followed the usual path in this field, going to film school, experimenting with short films and attending festivals. All that time, I was immersed in the concept of narrative - how to create it, how to shape it, how to convey it to my audience.
I always thought about narrative as something relevant in the entertainment industry and in the media, when there is an agenda. Turns out media almost always has an agenda these days, and it's almost always about politics. And politics directly impacts business.
My surprising conclusion was that stories matter as much in the real world as they do in the movies. A good storycan hold up the stock of a company that is currently losing money. Narratives can shape people's day to day behavior in a way that creates winners and losers in the real economy.
Understanding all of the above is necessary for a good investor, but it's not quite enough. A good investor needs solid discipline, an objective view of the world, zen-like peace of mind, and a good deal of courage. Some of these qualities are born traits, while others can be acquired. Fortunately, I was blessed with the harder one to come by, namely that zen-like attitude. It's hard for me to get into extreme emotional states. I don't really panic. I find that most people get excited too easily. And possibly strangest of all, I don't really care about money. At least not in the sense that many other people do. I view money as a tool that needs to be put to work in my benefit, not something that I need to work for. Having less money doesn't make me fearful. Having more money doesn't make me think better about myself.
Eventually, convinced that I possessed every quality of a good investor, I opened up my individual trading account after thoroughly researching many brokerage firms.
In time, I created my own management process, bringing a grassroots approach to trading and investing. Every facet of this investment system is a result of my own thinking and reflecting on the challenges of investing in the stock market and generating meaningful returns. I learned this trade by taking risks for myself while at the same time absorbing some of my mentor's teachings. As it turns out, I also became a mentor for others.