One of the most underrated parts of investing is the level of CONVICTION you have in a given investment.

I bought Palantir at $10 last year, but didn’t have enough conviction in the company to place a big enough bet on it to matter in the end. I even sold on the way up, still doubting my already small position.

Palantir is up more than 7X since then, so even though I was partially right, I largely missed out.

Luckily, I had more conviction in companies like Tesla, Sofi, Hims, Hood, and Nvidia, which made up for missing out in other places. I was willing to take money that could’ve been sitting in cash or gone to miscellaneous purchases I didn’t need, because my conviction was strong in these investments.

Most of these companies are up 2-3X over the last 18 months. Not nearly as much as Palantir, but because my confidence allowed me to place a larger investment, I made far more than I ever would’ve in Palantir.

You can borrow another person’s conviction in the short-term, but you have to develop your own conviction over the long-term. Long-term conviction only comes from understanding the vision, fundamentals, and financials of a company on a deep level. How does the stock price (and more importantly market cap) compare to how much the company is making today and how much it can predictably make in the years to come.

This conviction comes in handy on days like today where a company like HIMS is down 30% in just a few days. Investors with conviction will get excited and buy more, while those without it are likely to sell. If you’re new to investing, it will take you years to develop true confidence and conviction in your investments.

To get there, I highly recommend picking 2-3 companies to dive DEEP on. Listen to all of their earnings calls from the past year or two. Use a site like vizualstocks.com to understand their financials and the trends of where they are headed. Follow people on X who understand the company and are consistently sharing insights. Watch all the youtube videos posted about that company. Understand what separates this company from the competition now and in the future. Do your own math on earnings and valuations that you expect them to hit over the next 3, 5, and 10 years.

I did this for over 3 years with Tesla, and it taught me more about investing than I would have if I just knew a little bit about 20 different companies. Diving deep on a single company provides you with the knowledge and skills that you can apply anywhere.

You’ll understand what true conviction looks and feels like, so you recognize when you have it in the future, or notice when you are just chasing the next hot opportunity.