As with most aspects of human life, investment is a struggle against the uncertainty of the future. So no matter how confident you are, unless you are a god, you cannot guarantee the outcome and can only talk about probability.

If the reason why you need to invest long term is because you can’t time the market, then the reason why you need to diversify your investment is to secure enough trials for probability to take effect.Even if this investment had a 99% chance of success, what if that 1% happened to occur this time and I bet everything on it? What would happen? You would simply be kicked out of the market.Diversifying investments is a way to prevent such risks, but if you just increase the number of investment items without thinking, it is no different from index investing. It is actually inefficient because it consumes a lot of time and resources. Therefore, diversification should be done within a range where you can find alpha.

Then how can you increase your investment winning rate? There are many ways, but from the investment mindset perspective, you need to 1) not be buried in the opinions of the majority, and 2) be strict about the results.

1) Don't get bogged down in the opinions of the majority.

Humans, being social animals, generally communicate with others constantly, listening to their opinions. This is an innate disposition, so we cannot judge it as good or bad, but the problem is that this often applies to investment as well, and this often leads to undesirable results.

There are some people who are insecure about their own decisions and ask many people for advice, following the majority opinion, but this is never a good thing. This is because most people tend to see only what they want to see, and in investment, what they want to see is the facts that are favorable to their position.If I am holding a long position, everything in the world looks beautiful, but if I am holding a short position, it looks like everything is going to collapse. Because of the tendency of the majority to pick and choose only the necessary parts from the whole, the opinions of the majority are rarely right, and there are many cases where they are greatly wrong. The fact that the majority is optimistic about the market means that most of them are holding long positions. But who will take new long positions? If there is no one left to buy, then the only thing left is a decline.

Another problem with being bogged down in the opinions of the majority is that the result is average. The opinions of the majority can only approach the average level of the group, making you an ordinary investor.As I mentioned before, one of my main hobbies is Go. In Go, there is something called "jisebago", which is a game where people with different skill levels play against each other, with the lower-ranked player starting with a few stones placed first. Generally, there are fewer pros and more amateurs, so there are many people who look at it from the perspective of the amateurs. But if 10 amateurs get together and consult to face one pro, would they win? No. No matter how much 10 amateurs consult, they will only come to conclusions at the amateur level.

If you want to rise from amateur to pro, you need to first make an effort to hone your skills, and the group you receive advice from must be much better than you. It doesn't make much sense to ask for advice from an unverified group. Collective intelligence only makes sense when the group is reliable.

2) Be strict about the results.

Investment is a struggle against the many uncertainties of the future, so it can only be described in terms of probability. Even the most outstanding experts cannot win with every idea. Therefore, all investors can only receive a mixed result of success and failure. You need to be strict about your results.

That is, for successful results, you should be aware that it was a matter of luck and that if you were unlucky, you could have gotten a failed result for the same idea. The problem, however, is that some people think the same way about failed results, which is never a good thing. You should carefully review what factors influenced the failed results, one by one, and reflect deeply and realize your mistakes. If you just blame it on bad luck, you will repeat the same mistakes next time.

Some people think that by entering the investment industry and gaining experience and knowledge over a long period of time, they will become much better investors than beginners. But that's not always the case. There are many factors that affect investment results other than knowledge and experience. A considerable number of them are close to innate disposition, which are difficult to change. It is especially difficult to change them as an adult. Therefore, if you want to improve even a little bit, you have to make up your mind and be tough.

In fact, in the long run, if your win rate is over 50%, you can continue to accumulate profits as long as you manage your risks well. It is also important to continuously try ideas with an asymmetric return structure where the upside is large and the downside is small. It is very difficult for an investor with a 60% win rate to increase it to 65% or 70%. Only a small number of people who do not follow the majority opinion and are not lenient with themselves can gradually increase their win rate.