The 10 Biggest Problems Investor Face And How To Solve Them

Dear Investor,

Last year, a Reddit user surveyed investors about the problems they struggle with most and condensed them into 10 core questions.

Today, I’ll address each of them. Before we begin, keep this in mind:

This advice is for long-term buy-and-hold investors. If you follow strategies like special situations or net-nets, some points will differ.

Everything I share is based on more than 25 years of market experience and on building an investing process that is repeatable, profitable, and time-efficient.

Time spent researching stocks matters more than most people realize. It also depends on your financial resources. Most investors don’t manage eight-figure portfolios, so spending excessive time on research often does not make sense from a financial perspective. That topic deserves a separate article.

Let’s get started.

When should I buy or sell? What if I buy and it drops? What if I sell and it keeps going up?

For long-term investors, selling should not be a frequent concern if the initial research was done properly. As long as the business performs well, the share price will follow over time.

You should sell only if you need the money or if the business becomes clearly overvalued relative to industry norms.

If you made a poor investment decision, sell as soon as you recognize the mistake or when the company’s outlook worsens due to factors like regulation, disruptive technology, or poor management.

On the buying side, you cannot time the market. I have never seen a reliable method that identifies bottoms. I buy when I see value. If the price drops afterward, it only matters if my analysis was wrong. If normal price moves make you uncomfortable, you likely haven’t done enough homework.

Analysis paralysis: the more I research, the less I know.

You don’t need deep dives into complex jargon to invest well. You don’t need to obsess over unit economics or future margin compression just to sound smart.

If you’ve read my stock reports, you’ll notice they are straightforward and based on common sense. Investing should be understandable.

Focus on the important metrics that actually move the business. Learn how to read financial statements. Look for management teams that increase shareholder value through better products, acquisitions, buybacks, and dividend growth.

Earnings call transcripts are especially useful. Most key questions are addressed there directly.

Valuation feels unreliable. Which metrics actually work?

Start with free cash flow and how consistently a company generates it with low capital requirements. From that, calculate the free cash flow yield, which is often more useful than the price-to-earnings ratio.

Return on invested capital, return on capital employed, margins, and price-to-sales are also helpful.

Your goal is to understand how efficiently a company generates cash and how sustainable that cash generation is. Then compare today’s valuation to the company’s own history and to industry averages. Buy when the valuation is clearly better than usual.

I find an undervalued stock, but it stays undervalued for years.

First, focus on quality before price. Many investors screen for cheap stocks while ignoring deteriorating fundamentals or the lack of a clear internal growth driver.

If a stock depends on external events management cannot control, it is often not worth owning.

Second, avoid “high-conviction” positions. After +25 years in the market, one thing is certain: surprises always happen.

Diversify properly. If you own 20 stocks at roughly equal weights, a few laggards won’t hurt much. Strong businesses will carry the portfolio over time.

I panic sell or get emotionally attached.

This usually means you don’t fully understand what you’re buying. Daily price movements should not matter. What matters are earnings reports and fundamental changes.

Ignore short-term market behavior as long as the business remains sound. Learn the basics first, then keep refining your knowledge.

There is too much noise.

Financial media exists to monetize fear and greed, not to educate investors.

Studying market history helps. Most events have happened before, and they were often less severe than headlines suggested.

How do I know if a company has a moat?

Ask one question: What would happen if the company disappeared tomorrow? Who would care?

The more customers, businesses, or systems that are affected, the stronger the competitive advantage.

How do I know if a CEO is good?

Look at past performance. If the CEO has been in place for years, results speak for themselves.

If the CEO is new, check their background. Do they have real industry experience? Expertise matters. Boeing is a clear example of what happens when cost-focused managers replace technical experts.

Read annual shareholder letters and earnings call transcripts. Pay attention to how management answers tough questions. Clear and honest communication is a strong signal of good leadership.

I ran the numbers. Now what?

You compare. Always compare.

Look at all available opportunities and choose the best one. Don’t obsess over a single stock when many high-quality businesses may be trading at better prices.

If a company is great but overpriced, put it on a watchlist. I track many stocks I would like to own but haven’t bought because better opportunities were available.

By the time I find a stock, big investors are already in.

That doesn’t matter. A company doesn’t become uninvestable because institutions own it.

The idea that you must beat “smart money” is a myth. You see this often with IPOs, where people try to be early at any cost.

Are you too late to invest in Microsoft because it has traded for decades? You are only too late when the price no longer makes sense relative to fundamentals. In that case, wait. Markets often offer opportunities after temporary setbacks.

This topic could fill an entire book, but these rules provide a solid framework.

One final point that is often overlooked:

Selection criteria matter more than individual stocks. Build your portfolio around them. Think of your portfolio as a single business made up of strong parts.

If your selection process is strict, individual positions matter less. You won’t need to obsess over single stocks because multiple high-quality businesses will carry the load together.

Below, you’ll find my latest stock analysis that can help you build a strong portfolio.

Here are the facts:

• Zero debt

• Consistent free cash flow margins around 30%

• Less than 5% of its cash flow is used for capital expenditures

• Digital infrastructure player that’s essential for its niche

• Dividend of around 4%

• Trading at a free cash flow yield of around 5.2%

• No competition

• Founder-led for more than 3 decades

• Small-cap

👉 Download the report 👈 and see if this matches what you look for in a long-term holding.

Until the next issue.

If you enjoy The Onveston Letter, let me and the algorithm know by clicking the “Like” button ❤️.

And if you aren’t a subscriber yet, then sign up below to not miss out on future articles.

For new readers: Check out all my previous posts here

Disclaimer: This analysis is not advice to buy or sell this or any stock; it is just pointing out an objective observation of unique patterns that developed from my research. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice.

Thanks for reading! This post is public so feel free to share it.