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4 investing lessons from Game of Thrones

Given its twists, turns, shocks, horror, good, evil, deceit, betrayal, duplicitous characters, and removal from reality the local share market actually has a lot of parallels with hit reality show Game of Thrones.

I must admit to being no GoT expert, but I do know if some people spent as much time researching the stock market as they do watching the show then they’d be among the world’s leading investing experts.

In fact GoT’s wild popularity even has a few lessons for aspiring investors on how to make money in the real world.

So here we go.

1. “Be careful who you trust”  – like GoT the share market is full of story tellers boasting of big things, but constantly crashing back to earth. Therefore investors must be careful in deciding what companies are telling a story to impress and what companies are the real deal in generating consistent profit growth. Which side of this line you end up will be a huge driver of your overall returns.

2. “Don’t believe the hype” given the panning the final season of GoT received from the media and public we know that hype and expectation can sometimes lead us into making mistakes in the share market. For example a lot of speculators bid the likes of speculative stocks like Splitit Ltd (ASX: SPT), Yojee Ltd (ASX: YOJ), GetSwift Ltd (ASX: GSW) and Auscann Ltd (ASX: AC8) scarily high on nothing but tall tales. Only to be confronted with painful price plunges later.

3.The biggest risk, may be not taking enough risk” – GoT is all about getting ahead in life, which is a shared aim of many share market participants. So while the first two lessons may seem a little scary it’s important to remember there’s no reward without risk in the share market with the two inversely correlated. So assuming you’ve learned how to identify and avoid the pitfalls then taking on more risk in terms of buying growth-oriented companies (over income-oriented companies) makes sense if you want to end up on top.

4.Winter isn’t coming” – the media is constantly full of headlines predicting a coming crash or King Joffrey-style share market Armageddon, although over the long term developed share markets have always gone higher. Therefore attempting to avoid Winter by selling out ahead of an anticipated cold snap is usually an expensive mistake.

So don’t be afraid of the dark….

And apologies for any inadvertent spoilers, but the good thing about the share market over GoT is nobody knows what will happen before you.

This gives you a potential edge to find and buy companies that could be bigger global hits than GoT in the future.

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Motley Fool contributor Tom Richardson owns shares of AFTERPAY T FPO.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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