I’ve spent most of my life in the markets. Not trading headlines or chasing momentum but doing the work that doesn’t make noise, reading filings, studying behavior, and understanding how capital moves. The kind of work that builds conviction when others are guessing. I have learned many investing lessons.
Now, as a father, I think differently about what all that experience is worth. It’s no longer just about making the right calls. It’s about what lessons are worth passing down. What would I want my children to understand if they ever chose to do this for themselves?
Of all the things I’ve learned, one stands above the rest: the price you pay matters, but the catalyst matters more. That’s what turns potential into an outcome. Value without change is dead capital. Most investors never grasp that. And many who do, learn it too late.
Price Is Not Enough
One of the first things new investors learn is to look for what’s cheap. Low P/E ratios, discounted cash flows, and book value comparisons. It’s the language of value investing, and it sounds responsible. But price alone has fooled more investors than hype ever did.
A low multiple doesn’t mean a stock is misunderstood. It often means it’s understood perfectly. The business is struggling, the capital is fleeing, or there’s no obvious path forward. And yet investors convince themselves that reversion will do the work. I’ve seen more people lose money waiting for ‘reversion’ than chasing meme stocks. At least the meme chasers admit they’re gambling.
But the market doesn’t reward potential. It rewards change. Without a reason for the market to reprice the asset, it doesn’t matter how cheap it looks on paper. It stays stuck, sometimes for years. Worse, it can drift lower while you wait for a rerating that never comes. Undervaluation is a starting point. What moves the needle is what happens next. That’s where most get it wrong.
The Role Of The Catalyst
If the price is the invitation, the catalyst is the reason for staying. It’s the mechanism that turns undervaluation into return. Without it, all you have is a theory waiting to expire.
A catalyst can take many forms. Sometimes it’s structural, like a spinoff or a breakup that forces the market to reassess value. Sometimes it’s operational, a new CEO, a cost reset, or a segment divestiture. And sometimes it’s behavioral insiders buying in size, activists getting involved, or management shifting incentives in ways the market hasn’t fully priced.
When I evaluate a situation, I look for pressure points. Is there someone at the table with a reason to act? Is the structure set up to expose hidden value? Is the float tight, the coverage thin, and the motivation clear?
Earlier this year, we watched a company separate a slow-growth legacy arm from a higher-margin segment the market had ignored. Within weeks of the spin, the story changed. Coverage picked up, funds started to take notice, and the multiple began to climb. The setup was clean. The change was visible. The value was unlocked.
Without a catalyst, you’re not investing in a business. You’re investing in hope. And hope, in this game, is expensive.
Behavior Over Brilliance
Most mistakes in investing don’t come from bad analysis. They come from emotion. Smart people panic. Experienced people chase. Everyone, at some point, fights the urge to act when doing nothing is the right move.
The longer I’ve been in the markets, the more I’ve seen that discipline, conviction, and patience beat sheer intelligence. It’s not about learning more; it’s about being better at managing yourself and mainly, your emotions.
You can run a perfect model and still sell too early. You can identify a clear opportunity and abandon it because the price moved against you for a week. Panic-selling, anchoring to your entry point, and following the crowd because it feels safer—these are the traps that quietly drain performance.
What I want my kids to understand is that investing isn’t just strategy. It’s psychology. Your temperament shapes your returns more than any spreadsheet. Half the game is knowing when to act. The other half knows when not to.
Look Where No One’s Looking
Most underperformance doesn’t come from bad stock picking. It comes from crowding. Too many investors chasing the same idea at the same time, all hoping they’ll be the first to exit when it turns.
Real opportunity usually doesn’t look exciting. It feels uncomfortable, or at least unfamiliar. It rarely comes with a perfect story or a clean chart. In my experience, the best setups often appear when no one is paying attention, not because they’re broken, but because they’re complex, misjudged, or simply ignored.
Spinoffs, restructurings, and special situations don’t scream for attention. They require reading filings, digging into incentives, and understanding capital flow. They don’t fit in screeners or spark much coverage. That’s exactly why they work.
I want my kids to understand this early: you don’t find an edge by chasing what everyone else already sees. You find it by doing the work others skip and by recognizing change before the crowd does. The goal isn’t to buy cheap. The goal is to buy misunderstood.
The Bigger Investing Lesson
At its core, investing isn’t just about money. It’s about freedom. The freedom to choose how you spend your time, who you spend it with, and what you say yes or no to. That’s the real return. Everything else is just numbers.
Done right, investing gives you control. Not all at once, and not without setbacks, but enough to live on your own terms. That means being able to walk away from noise, avoid bad trades in life as well as markets, and focus on what matters most.
That’s the deeper reason I want my kids to learn these lessons early. It’s not to get rich. It’s to avoid being dependent. The earlier they understand how capital works, how to think independently, and how to spot real opportunity, the sooner they’ll have the space to live life deliberately. And that, more than any position or payout, is the goal.
Price gets you in the room. The catalyst gets you paid. That’s the difference between holding potential and realizing value. It’s the investing lesson I’ve learned through experience, and the one I care most about passing down. Not just because it leads to better returns, but because it leads to something more important: independence. When you understand what really moves markets, you’re not just investing better. You’re living better.