Wednesday, 30 June 2021
Quote for the day
"Like most trends, at the beginning it's driven by fundamentals, at some point speculation takes over. What the wise man does in the beginning, the fool does in the end." - Warren Buffett
Tuesday, 29 June 2021
Monday, 28 June 2021
Quote for the day
"There are only two ways to establish competitive advantage: do things better than others or do them differently." - Karl Albrecht
Sunday, 27 June 2021
Quote for the day
"For a person to build a rich and rewarding life for himself, there are certain qualities and bits of knowledge that he needs to acquire. There are also things, harmful attitudes, superstitions, and emotions that he needs to chip away. A person needs to chip away everything that doesn't look like the person he or she most wants to become." - Earl Nightingale
Saturday, 26 June 2021
Three "Crazy" Rules of Investing You'll Never Hear From Your Broker
In life, things rarely work out the way you'd expect. The "nice guy" hardly ever gets the girl. The smartest kid in the class never becomes rich and famous. Meanwhile, the problematic student with lousy grades in high school ends up in the U.S. Senate -- or beyond.
The investment world also has its share of "crazy" rules. I call them "crazy" because they highlight the way the investing world works in ways you would never expect.
Yet understanding these "crazy" rules, and how you can apply them, can spell the difference between making (and keeping) your investment profits -- or, at worst, spending an unpleasant stint in the poor house.
With that backdrop, here are my three "crazy" rules...
1. Don't Confuse Luck with Smarts
Old time traders put this view another way: "Never confuse brains with a bull market." The role of "luck" in investment success is more complicated than you think.
You probably believe that if you turn a $10,000 investment in a single stock into $1 million, it would be the best thing that could ever happen to you. But you'd be wrong.
After enjoying such remarkable success, you'd suddenly think that you'd "cracked the code" of the markets. The next time around, you'd have the confidence to bet your life savings on another "can't lose" investment.
And maybe you'd win this time, as well. So you do it again.
After all, you calculate that if you repeat your success only one more time, you'd have $100 million in the bank. But this time, you tell yourself that once this investment hits, you'd take all of your chips off of the table.
Sure enough, your luck runs out and your latest "can't lose" investment flops. And since you "bet the farm," you not only lost your shirt but you're also deeply in debt.
You wake up one morning to realize that you are worse off than when you started.
That's the problem with sudden wealth -- whether it comes from a big bet on a stock tip, buying a winning lottery ticket or becoming a highly paid pro-athlete.
Almost everyone who wins the lottery ends up poorer five years later than beforehand. You see formerly wealthy pro athletes declaring bankruptcy almost every week.
The lesson? Understand that if you have ever won a big investment bet, you were at least as lucky as you were smart.
Over the long term, there are no shortcuts. Making money on a consistent basis is a grind that is one part "insight" and nine parts "discipline".
2. Your Analysis Is Irrelevant to Your Investment Success
The philosopher Friedrich Nietzsche once observed that, "Any explanation is better than none."
I disagree. Sometimes, in the investment world, no explanation is really necessary -- or relevant.
Today, you suffer from information overload. You can access more information about the financial markets than ever before. Yet, I bet your investment returns have not improved.
Not only do we seem incapable of divining the future, we can't even seem to agree on what happened. Was the credit crunch a result of Greenspan's monetary policy? Bernanke's incompetence? Clinton's "affirmative action" mortgages for low-income borrowers? Or was it just a classic mania? We crave explanations because it gives us an illusion of control.
But it gets even worse. Even the "doom and gloomers " who got their analysis "right" in predicting the credit crunch weren't able to turn their insights into money for their clients. Analysts who promised to "crash-proof" their clients' portfolios ended up losing more money for their clients than if they had stuck with simple index funds.
That's because they weren't that right after all. Gold didn't hit $3,000 an ounce. The U.S. dollar didn't implode. Treasuries didn't collapse. And the U.S. stock market recovered.
The lesson? Successful investors are successful in the long term because they admit their mistakes.
As the world's greatest speculator George Soros said, "My system doesn't work by making valid predictions. It works by allowing me to recognize when I am wrong."
3. Your "Intelligence" is Your Biggest Handicap
Warren Buffett famously observed that it takes no more than average intelligence to become a successful investor.
I'd add something to that perspective. I'd say high intelligence is actually a handicap to successful investing.
Here's why. When you are smart, you are used to being 100% correct. You just can't accept the possibility of being wrong. So you stick to your guns, even when the market is telling you otherwise.
That's why overeducated Wall Street analysts make such lousy money managers and why hedge fund managers who flaunt their intelligence inevitably flounder.
Think about it this way. If high intelligence was the key to successful investing, top business school professors and economists would be the wealthiest guys on the planet. Instead, the Forbes 400 is populated by dropouts from places like Harvard (Bill Gates) and Stanford (the Google guys).
That's also why poker players make the best traders and investors. They play each hand as if it is dealt to them. If they get a bad hand, they fold. They play the investment game the same way.
Perhaps that's also why a former Dean of Harvard College, Henry Rosovsky, observed the following about Harvard students, "Our A students become professors. Our B students go to law school. Our C students rule the world."
Now you also understand why my Harvard law school classmate Barack Obama doesn't release his college and law school transcripts.
How You Can Apply These Three Crazy Rules
So, how can you use these "crazy" rules to improve your investment returns?
First, never bet too big on one idea. You may get lucky once. Maybe even twice. But your luck will eventually run out. And if you bet the farm, you are out of the investment game for good.
Second, don't delude yourself into thinking that you have special insight into the market. Bring that attitude to your investments, and you will have your head handed to you.
And it's not a question of "if" but "when".
Third, learn to think of your investments like a hand in a poker game. Up the ante when you are lucky enough to get a good hand. But also be prepared to fold -- and to fold often.
By following these rules, I have saved me from my own follies more than once.
They will do the same for you.
By Nicholas A. Vardy
Editor, The Global Guru
http://www.nicholasvardy.com
The investment world also has its share of "crazy" rules. I call them "crazy" because they highlight the way the investing world works in ways you would never expect.
Yet understanding these "crazy" rules, and how you can apply them, can spell the difference between making (and keeping) your investment profits -- or, at worst, spending an unpleasant stint in the poor house.
With that backdrop, here are my three "crazy" rules...
1. Don't Confuse Luck with Smarts
Old time traders put this view another way: "Never confuse brains with a bull market." The role of "luck" in investment success is more complicated than you think.
You probably believe that if you turn a $10,000 investment in a single stock into $1 million, it would be the best thing that could ever happen to you. But you'd be wrong.
After enjoying such remarkable success, you'd suddenly think that you'd "cracked the code" of the markets. The next time around, you'd have the confidence to bet your life savings on another "can't lose" investment.
And maybe you'd win this time, as well. So you do it again.
After all, you calculate that if you repeat your success only one more time, you'd have $100 million in the bank. But this time, you tell yourself that once this investment hits, you'd take all of your chips off of the table.
Sure enough, your luck runs out and your latest "can't lose" investment flops. And since you "bet the farm," you not only lost your shirt but you're also deeply in debt.
You wake up one morning to realize that you are worse off than when you started.
That's the problem with sudden wealth -- whether it comes from a big bet on a stock tip, buying a winning lottery ticket or becoming a highly paid pro-athlete.
Almost everyone who wins the lottery ends up poorer five years later than beforehand. You see formerly wealthy pro athletes declaring bankruptcy almost every week.
The lesson? Understand that if you have ever won a big investment bet, you were at least as lucky as you were smart.
Over the long term, there are no shortcuts. Making money on a consistent basis is a grind that is one part "insight" and nine parts "discipline".
2. Your Analysis Is Irrelevant to Your Investment Success
The philosopher Friedrich Nietzsche once observed that, "Any explanation is better than none."
I disagree. Sometimes, in the investment world, no explanation is really necessary -- or relevant.
Today, you suffer from information overload. You can access more information about the financial markets than ever before. Yet, I bet your investment returns have not improved.
Not only do we seem incapable of divining the future, we can't even seem to agree on what happened. Was the credit crunch a result of Greenspan's monetary policy? Bernanke's incompetence? Clinton's "affirmative action" mortgages for low-income borrowers? Or was it just a classic mania? We crave explanations because it gives us an illusion of control.
But it gets even worse. Even the "doom and gloomers " who got their analysis "right" in predicting the credit crunch weren't able to turn their insights into money for their clients. Analysts who promised to "crash-proof" their clients' portfolios ended up losing more money for their clients than if they had stuck with simple index funds.
That's because they weren't that right after all. Gold didn't hit $3,000 an ounce. The U.S. dollar didn't implode. Treasuries didn't collapse. And the U.S. stock market recovered.
The lesson? Successful investors are successful in the long term because they admit their mistakes.
As the world's greatest speculator George Soros said, "My system doesn't work by making valid predictions. It works by allowing me to recognize when I am wrong."
3. Your "Intelligence" is Your Biggest Handicap
Warren Buffett famously observed that it takes no more than average intelligence to become a successful investor.
I'd add something to that perspective. I'd say high intelligence is actually a handicap to successful investing.
Here's why. When you are smart, you are used to being 100% correct. You just can't accept the possibility of being wrong. So you stick to your guns, even when the market is telling you otherwise.
That's why overeducated Wall Street analysts make such lousy money managers and why hedge fund managers who flaunt their intelligence inevitably flounder.
Think about it this way. If high intelligence was the key to successful investing, top business school professors and economists would be the wealthiest guys on the planet. Instead, the Forbes 400 is populated by dropouts from places like Harvard (Bill Gates) and Stanford (the Google guys).
That's also why poker players make the best traders and investors. They play each hand as if it is dealt to them. If they get a bad hand, they fold. They play the investment game the same way.
Perhaps that's also why a former Dean of Harvard College, Henry Rosovsky, observed the following about Harvard students, "Our A students become professors. Our B students go to law school. Our C students rule the world."
Now you also understand why my Harvard law school classmate Barack Obama doesn't release his college and law school transcripts.
How You Can Apply These Three Crazy Rules
So, how can you use these "crazy" rules to improve your investment returns?
First, never bet too big on one idea. You may get lucky once. Maybe even twice. But your luck will eventually run out. And if you bet the farm, you are out of the investment game for good.
Second, don't delude yourself into thinking that you have special insight into the market. Bring that attitude to your investments, and you will have your head handed to you.
And it's not a question of "if" but "when".
Third, learn to think of your investments like a hand in a poker game. Up the ante when you are lucky enough to get a good hand. But also be prepared to fold -- and to fold often.
By following these rules, I have saved me from my own follies more than once.
They will do the same for you.
By Nicholas A. Vardy
Editor, The Global Guru
http://www.nicholasvardy.com
Quote for the day
"If you never want to be criticized, for goodness sake don't do anything new." - Jeff Bezos
Friday, 25 June 2021
Thursday, 24 June 2021
Jesse Livermore's Trading Rules Written in 1940
1. Nothing new ever occurs in the business of
speculating or investing in securities and commodities.
2. Money cannot consistently be made trading every day or
every week during the year.
3. Don't trust your own opinion and back your judgment until
the action of the market itself confirms your opinion.
4. Markets are never wrong – opinions often are.
5. The real money made in speculating has been in
commitments showing in profit right from the start.
6. As long as a stock is acting right, and the market is
right, do not be in a hurry to take profits.
7. One should never permit speculative ventures to run
into investments.
8. The money lost by speculation alone is small compared
with the gigantic sums lost by so-called investors who have let their
investments ride.
9. Never buy a stock because it has had a big decline from
its previous high.
10. Never sell a stock because it seems high-priced.
11. I become a buyer as soon as a stock makes a new high on
its movement after having had a normal reaction.
12. Never average losses.
13. The human side of every person is the greatest enemy of
the average investor or speculator.
14. Wishful thinking must be banished.
15. Big movements take time to develop.
16. It is not good to be too curious about all the reasons
behind price movements.
17. It is much easier to watch a few than many.
18. If you cannot make money out of the leading active
issues, you are not going to make money out of the stock market as a whole.
19. The leaders of today may not be the leaders of two years
from now.
20. Do not become completely bearish or bullish on the whole
market because one stock in some particular group has plainly reversed its
course from the general trend.
21. Few people ever make money on tips. Beware of inside
information. If there was easy money lying around, no one would be forcing it
into your pocket.
Source: http://www.zerohedge.com
Wednesday, 23 June 2021
Quote for the day
"You can’t connect the dots looking forward, you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust something – your gut, destiny, life, karma, whatever. This approach has never let me down and it has made all the difference in my life." - Steve Jobs
Tuesday, 22 June 2021
Quote for the day
"You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine." - John C. Maxwell
Monday, 21 June 2021
Sunday, 20 June 2021
6 Steps To Investing Excellence
Do this and you'll become an expert investor.
You've probably heard of psychologist Dr. K. Anders Ericsson's theory that, with 10,000 hours of practice, anyone can become expert at anything.
The idea was popularised by Malcolm Gladwell in his book Outliers, and often pops up in articles and publications.
What about talent?
The idea that anyone can expertly master a random field of pursuit after 'just' 10,000 hours of practice has appeal. But I don't believe it's as simple as that. If you allocated me the task of mastering tennis or squash, for example, I'd probably give up long before achieving that goal due to boredom and frustration.
I reckon that to stick to anything long enough to master it then we need the existence of desire, and that probably won't take root unless we have some aptitude or talent for the pursuit in the first place.
Becoming an expert investor
Endeavouring to achieve investing prowess is stimulating for me. I have entrepreneurial blood pumping through my veins, and read business and investing books as a recreational activity!
In my case, on top of an earlier career in business, by my reckoning I have about 7,000 hours of serious investing study and practice under my belt, and my passion for it burns as strong as ever. I think that's what it takes to become an expert in any pursuit: a strong desire built on an aptitude for the field and 10,000 hours of practice.
In his book Be Excellent At Anything, Tony Schwartz sets out what he believes are six key steps to excellence:
1. Pursue what you love
This one is obvious to many, but it took a long time for me to figure it out. As a young man, I wasted far too much effort trying to shore up my weaknesses. Trust me, it's not the way to excel in life. I reckon the best way is to focus on building your strengths first. Use your leftover energy to address weaknesses, but not at the expense of playing to your strengths.
According to Schwartz, passion is an incredible motivator that fuels focus, resilience and perseverance. He's right. If you have that for investing, you're heading for, or already have, expertise. If investing is a bit of a chore, buy an index tracker or some other passive investment vehicle and divert your 10,000 hours to mastering golf, or singing, or horticulture, or whatever sets your passion burning.
2. Do the hardest work first
It's easy to become distracted in the world of investing. Reading bulletin board posts, newspapers and articles, or checking share price movements and posting on message boards -- although entertaining and sometimes useful on the margins -- is not necessarily counting towards the 10,000 hours of practice required to become an expert.
A better approach is to spend your time pursuing the difficult tasks that will move your investing forward. For example, valuing and analysing businesses, targeted study of investment literature, record keeping and analysis of investing successes and failures, and evaluating the differences between companies in terms of accounting, strategy, markets and competitive advantages.
3. Practise intensely
Short, intense bursts of focused activity are better than long, grinding hours glued to your desk and computer screen. In fact, Schwartz reckons that sessions of 90 minutes are quite long enough before taking a break.
Joyously, he also says that evidence shows that great performers practise no more than four-and-a-half hours a day. Indeed, I'm a great fan of the less-is-more school of investing, and rarely need encouragement to sneak off for some fun!
4. Seek expert feedback in small doses
There are many expert investors active on the Motley Fool discussion boards, and if you use the boards intelligently, and not for idle chat, they are a great investing resource. Schwartz says that the simpler and more precise the feedback, the more equipped you are to make adjustments. Too much feedback can create cognitive overload, increase anxiety and interfere with learning.
Bouncing ideas off other investors can be useful, I reckon, but don't become hooked on it. In the end, investors must make their own decisions and learn their own lessons.
5. Take regular renewal breaks
Relaxation or alternative activities can provide the opportunity to both rejuvenate and metabolise learning, says Schwartz. It's also during such activities that creative breakthroughs tend to arrive.
That certainly works for me. I've found that clarity and understanding on investment topics can arrive at the most unexpected moments.
6. Ritualise practice
For me, mornings are the best time to perform difficult and mentally demanding tasks like investing, so I ritualise practice then. Schwartz reckons that establishing specific, inviolable times for practice prevents us squandering energy thinking about them. He reckons that research shows that none of us possesses much will power or discipline, so rituals get around that weakness.
Overall, I think Schwartz is on the money. What do you think?
By Kevin Godbold
You've probably heard of psychologist Dr. K. Anders Ericsson's theory that, with 10,000 hours of practice, anyone can become expert at anything.
The idea was popularised by Malcolm Gladwell in his book Outliers, and often pops up in articles and publications.
What about talent?
The idea that anyone can expertly master a random field of pursuit after 'just' 10,000 hours of practice has appeal. But I don't believe it's as simple as that. If you allocated me the task of mastering tennis or squash, for example, I'd probably give up long before achieving that goal due to boredom and frustration.
I reckon that to stick to anything long enough to master it then we need the existence of desire, and that probably won't take root unless we have some aptitude or talent for the pursuit in the first place.
Becoming an expert investor
Endeavouring to achieve investing prowess is stimulating for me. I have entrepreneurial blood pumping through my veins, and read business and investing books as a recreational activity!
In my case, on top of an earlier career in business, by my reckoning I have about 7,000 hours of serious investing study and practice under my belt, and my passion for it burns as strong as ever. I think that's what it takes to become an expert in any pursuit: a strong desire built on an aptitude for the field and 10,000 hours of practice.
In his book Be Excellent At Anything, Tony Schwartz sets out what he believes are six key steps to excellence:
1. Pursue what you love
This one is obvious to many, but it took a long time for me to figure it out. As a young man, I wasted far too much effort trying to shore up my weaknesses. Trust me, it's not the way to excel in life. I reckon the best way is to focus on building your strengths first. Use your leftover energy to address weaknesses, but not at the expense of playing to your strengths.
According to Schwartz, passion is an incredible motivator that fuels focus, resilience and perseverance. He's right. If you have that for investing, you're heading for, or already have, expertise. If investing is a bit of a chore, buy an index tracker or some other passive investment vehicle and divert your 10,000 hours to mastering golf, or singing, or horticulture, or whatever sets your passion burning.
2. Do the hardest work first
It's easy to become distracted in the world of investing. Reading bulletin board posts, newspapers and articles, or checking share price movements and posting on message boards -- although entertaining and sometimes useful on the margins -- is not necessarily counting towards the 10,000 hours of practice required to become an expert.
A better approach is to spend your time pursuing the difficult tasks that will move your investing forward. For example, valuing and analysing businesses, targeted study of investment literature, record keeping and analysis of investing successes and failures, and evaluating the differences between companies in terms of accounting, strategy, markets and competitive advantages.
3. Practise intensely
Short, intense bursts of focused activity are better than long, grinding hours glued to your desk and computer screen. In fact, Schwartz reckons that sessions of 90 minutes are quite long enough before taking a break.
Joyously, he also says that evidence shows that great performers practise no more than four-and-a-half hours a day. Indeed, I'm a great fan of the less-is-more school of investing, and rarely need encouragement to sneak off for some fun!
4. Seek expert feedback in small doses
There are many expert investors active on the Motley Fool discussion boards, and if you use the boards intelligently, and not for idle chat, they are a great investing resource. Schwartz says that the simpler and more precise the feedback, the more equipped you are to make adjustments. Too much feedback can create cognitive overload, increase anxiety and interfere with learning.
Bouncing ideas off other investors can be useful, I reckon, but don't become hooked on it. In the end, investors must make their own decisions and learn their own lessons.
5. Take regular renewal breaks
Relaxation or alternative activities can provide the opportunity to both rejuvenate and metabolise learning, says Schwartz. It's also during such activities that creative breakthroughs tend to arrive.
That certainly works for me. I've found that clarity and understanding on investment topics can arrive at the most unexpected moments.
6. Ritualise practice
For me, mornings are the best time to perform difficult and mentally demanding tasks like investing, so I ritualise practice then. Schwartz reckons that establishing specific, inviolable times for practice prevents us squandering energy thinking about them. He reckons that research shows that none of us possesses much will power or discipline, so rituals get around that weakness.
Overall, I think Schwartz is on the money. What do you think?
By Kevin Godbold
www.fool.co.uk
Quote for the day
"If you want to be successful, find someone who has achieved the results you want and copy what they do and you’ll achieve the same results." - Tony Robbins
Saturday, 19 June 2021
The Best Investment Advice of All Time
The greatest investors follow a number of different systems, but their underlying principles tend to be similar and surprisingly simple. Here is what you can learn from their advice:
1. "Buy when there's blood in the streets." -- Baron Rothschild
Everyone thinks they know this one. Almost no one actually follows it. When your portfolio is leaking like the Titanic, why would you want to buy more? Wait a few months, and you'll usually be able to see why. Another good way to gauge the time to buy is that it feels terrible. When you feel good about a stock purchase, double check your numbers. It's easy to feel good when things are going up and up, but the long term results are likely to be disappointing.
2. "Buy a company any idiot could run, because sooner or later any idiot will be running it." -- Peter Lynch
Businesses with little competition and high profit margins can be run by almost anyone. Those with lots of competition and low margins require management genius. Stick with the simple business. Not only is it likely to do better, but you'll find it easier to decide when to sell. "Never invest in anything you can't illustrate with a crayon," Lynch said. It's still terrific advice.
3. "You won't improve results by pulling out the flowers and watering the weeds." -- Peter Lynch
People tend to think that what goes up must come down, and vice versa. While there is a tendency for stock prices to revert to the mean, a good business will continue to outperform a poor one. Selling your winners and keeping your losers is a bad plan.
4. "The best time to sell a stock is never."-- Warren Buffett
Does this mean you should really never sell a stock? No, but it means you should buy a business you'd be happy to hold for the foreseeable future. When things change for the worse you should sell, but trading in and out of the market frequently is usually a loser's game--especially for small investors.
5. "One way to end up with one million is to start with two million and use technical analysis."-- Ralph Seger
The average investor has the attention span of a two-year-old. He or she wants a way to make money now, and panics the minute a stock goes down. If someone offers complicated charts and formulas that promise quick profits, the ears perk up. The more complicated the method, the more appealing it is. Enter the voodoo practitioners, in the form of technical analysts. Of course technical analysis works some of the time. Everything works some of the time. But if you want a sure fire way to long term riches, look at the fundamentals and forget the fancy charts.
6. "The four most dangerous words in investing are 'This time it's different.'" -- John Templeton
The tech wreck is a recent example of this lesson, which investors never seem to learn. If you're being told that the market will perform in a way it never has in recorded history, be extremely skeptical. If someone starts talking about a "new paradigm," take your money and run for the hills.
7. "If the world's economists were laid end to end, they would all point in different directions." -- Arthur Motley
Calling economics a science is like calling an astrologer a life planner. Economists can't predict what will happen next month or next year with any degree of reliability. The best thing you can do is forget trying to predict the economy and invest for the long term. The ever-witty Peter Lynch put it another way: "If all the economists in the world were laid end to end, it wouldn't be a bad thing."
8. "An effective zero percent interest rate for hiding in a foxhole is prohibitive." -- Bill Gross
When people get scared, they flee to bank accounts and T-bills, even when the rates are laughable. But unless you take risks with some of your money, you effectively lose money all of the time, due to the eroding effects of inflation-which never seems to get as low as the interest rate on your bank account. Only in a time of rapid deflation would you want to keep most of your money in cash.
9. "The person that turns over the most rocks wins the game."-- Peter Lynch
Look at two stocks, and you'll probably find two so-so buys. Look at twenty or thirty, and you're likely to find a couple that look extraordinarily good. Looking at lots of options is the secret of finding winners.
10. "In this business, if you're good you're going to be right six times out of ten." You're never going to be right nine times out of ten."-- Peter Lynch
Of course by "good" Lynch might have meant himself. You'd better make that four out of ten if you're not Peter Lynch. It doesn't matter. If you make four great picks, you'll still do just fine.
11. "A lot of great fortunes in the world have been made by owning a single wonderful business." -- Warren Buffet
When you know you have a great idea, place a sizeable bet and have some patience. Look at the twenty-year returns of some of the world's greatest businesses and you'll be astonished. Remember, though, that those companies are unlikely to repeat that performance because they've gotten too large to grow quickly. The key to finding big winners is to find little companies with big prospects.
You may have heard these before but, this time, take them to heart. Use these rules to invest until it becomes second nature. Hang in there, even if things don't go your way at first. In the short term, you may think you're crazy to follow some of this advice. But look at your returns in five years or ten, and you'll begin to understand how the rich get richer.
By Anthony Bae
Article Source: http://EzineArticles.com/6550005
1. "Buy when there's blood in the streets." -- Baron Rothschild
Everyone thinks they know this one. Almost no one actually follows it. When your portfolio is leaking like the Titanic, why would you want to buy more? Wait a few months, and you'll usually be able to see why. Another good way to gauge the time to buy is that it feels terrible. When you feel good about a stock purchase, double check your numbers. It's easy to feel good when things are going up and up, but the long term results are likely to be disappointing.
2. "Buy a company any idiot could run, because sooner or later any idiot will be running it." -- Peter Lynch
Businesses with little competition and high profit margins can be run by almost anyone. Those with lots of competition and low margins require management genius. Stick with the simple business. Not only is it likely to do better, but you'll find it easier to decide when to sell. "Never invest in anything you can't illustrate with a crayon," Lynch said. It's still terrific advice.
3. "You won't improve results by pulling out the flowers and watering the weeds." -- Peter Lynch
People tend to think that what goes up must come down, and vice versa. While there is a tendency for stock prices to revert to the mean, a good business will continue to outperform a poor one. Selling your winners and keeping your losers is a bad plan.
4. "The best time to sell a stock is never."-- Warren Buffett
Does this mean you should really never sell a stock? No, but it means you should buy a business you'd be happy to hold for the foreseeable future. When things change for the worse you should sell, but trading in and out of the market frequently is usually a loser's game--especially for small investors.
5. "One way to end up with one million is to start with two million and use technical analysis."-- Ralph Seger
The average investor has the attention span of a two-year-old. He or she wants a way to make money now, and panics the minute a stock goes down. If someone offers complicated charts and formulas that promise quick profits, the ears perk up. The more complicated the method, the more appealing it is. Enter the voodoo practitioners, in the form of technical analysts. Of course technical analysis works some of the time. Everything works some of the time. But if you want a sure fire way to long term riches, look at the fundamentals and forget the fancy charts.
6. "The four most dangerous words in investing are 'This time it's different.'" -- John Templeton
The tech wreck is a recent example of this lesson, which investors never seem to learn. If you're being told that the market will perform in a way it never has in recorded history, be extremely skeptical. If someone starts talking about a "new paradigm," take your money and run for the hills.
7. "If the world's economists were laid end to end, they would all point in different directions." -- Arthur Motley
Calling economics a science is like calling an astrologer a life planner. Economists can't predict what will happen next month or next year with any degree of reliability. The best thing you can do is forget trying to predict the economy and invest for the long term. The ever-witty Peter Lynch put it another way: "If all the economists in the world were laid end to end, it wouldn't be a bad thing."
8. "An effective zero percent interest rate for hiding in a foxhole is prohibitive." -- Bill Gross
When people get scared, they flee to bank accounts and T-bills, even when the rates are laughable. But unless you take risks with some of your money, you effectively lose money all of the time, due to the eroding effects of inflation-which never seems to get as low as the interest rate on your bank account. Only in a time of rapid deflation would you want to keep most of your money in cash.
9. "The person that turns over the most rocks wins the game."-- Peter Lynch
Look at two stocks, and you'll probably find two so-so buys. Look at twenty or thirty, and you're likely to find a couple that look extraordinarily good. Looking at lots of options is the secret of finding winners.
10. "In this business, if you're good you're going to be right six times out of ten." You're never going to be right nine times out of ten."-- Peter Lynch
Of course by "good" Lynch might have meant himself. You'd better make that four out of ten if you're not Peter Lynch. It doesn't matter. If you make four great picks, you'll still do just fine.
11. "A lot of great fortunes in the world have been made by owning a single wonderful business." -- Warren Buffet
When you know you have a great idea, place a sizeable bet and have some patience. Look at the twenty-year returns of some of the world's greatest businesses and you'll be astonished. Remember, though, that those companies are unlikely to repeat that performance because they've gotten too large to grow quickly. The key to finding big winners is to find little companies with big prospects.
You may have heard these before but, this time, take them to heart. Use these rules to invest until it becomes second nature. Hang in there, even if things don't go your way at first. In the short term, you may think you're crazy to follow some of this advice. But look at your returns in five years or ten, and you'll begin to understand how the rich get richer.
By Anthony Bae
Article Source: http://EzineArticles.com/6550005
Quote for the day
"If you're not making mistakes, then you're not making decisions." - Catherine Cook,
Friday, 18 June 2021
Quote for the day
"A friendship founded on business is better than a business founded on friendship." - John D. Rockefeller
Thursday, 17 June 2021
Quote for the day
"I’ve been blessed to find people who are smarter than I am, and they help me to execute the vision I have." - Russell Simmons
Wednesday, 16 June 2021
Quote for the day
"Identify your problems but give your power and energy to solutions." - Tony Robbins
Tuesday, 15 June 2021
Quote for the day
"Patience, persistence, and perspiration make an unbeatable combination for success." - Napoleon Hill
Monday, 14 June 2021
Quote for the day
"For me, life is continuously being hungry. The meaning of life is not simply to exist, to survive, but to move ahead, to go up, to achieve, to conquer." - Arnold Schwarzenegger
Sunday, 13 June 2021
The 13 Traits Every Successful Business Person Must Learn
The men and women we recognize today as the titans of business earned their titles not because they had great ideas, but because they practised certain behaviours. Their successes were the products of chemical reactions, with their natural and trained business acumens as the reactants and their great ideas as the catalysts.
Whether they were old world titans of industry and invention – such as John D. Rockefeller, Dale Carnegie, J.P. Morgan, Thomas Edison, Henry Ford, and Cornelius Vanderbilt – or are the new world titans of technology – such as Steve Jobs, Bill Gates, Jeff Bezos, Mark Zuckerberg – they all positioned themselves to see or predict issues in the (coming) world, and then went about solving those problems.
Regardless of the eras into which these individuals were born, they were bound to make waves of change in the modern world, so let’s dig deeper into what traits made them great so that you may one day join their ranks.
1. Take Responsibility
At the end of the day, everything your company does – good or bad – reflects on you as its leader. So whenever something goes awry, lead by example and be accountable for the mistakes and proactive about fixing them.
2. Communicate Effectively
One of the most valuable traits of a business leader is his or her ability to communicate well with anyone, be it his or her superiors, equals, employees, partners, or competitors.
All of these folks need information from you, and if you can give it to them quickly and effectively, you’ll save everyone a lot of headaches and wasted time. You’ll also have a lot of things to communicate non-verbally – such as your strength as a leader, your personal character, and your mission – so keep in mind that communication is not solely limited to the transaction of words. This one was really hard for me. I am a great salesman and so I thought that made me a great communicator in our company but it didn't. I always expected people to work at my pace and my speed and do things the way I wanted but I was never able to relay how and why that is important. Then when things would fall behind or apart I would get angry. This was because I had no properly relayed my vision for how I saw our future and how we were gonna get there together. Once I showed my team what my vision was and had them pitch in to really turn it into a strategic objective our company took off.
3. Demand Quality
Demand good work from your employees work as well as from yourself. The fact that you hold yourself to high standards will encourage your employees to do the same, especially if they know that you don’t tolerate sub-par work from anyone. Additionally, always be serving something of value to your customers and they’ll keep coming back for that quality product. This is huge I am very hard on myself to turn out great work and make great trades and teach great classes. In our company we even keep track of metrics so that the team can see how well I am doing my functions. We manage results not personalities & people. This takes the politics out of things and makes us into a cohesive and productive team.
4. Value Consistency
Whether it means being punctual for every meeting, showing up early for work every day, or always hitting product deadlines, the fact that you and your company can get work done on a regular basis makes you an asset.
While the flashy worker on your team who always appears to do good work, it’s the dependable and consistent workers who keep the world turning. When you’re reliable, you’re useful, and then you’re useful, you’re valued.
5. Require Efficiency
Bloated and starving workplaces eventually start cutting into profits. So, adopt lean methodologies; trim the fat from the organization to morph it into a machine running on full-steam.
Don’t be afraid to replace the employee who’s dragging the team down with their procrastinating, Implement new systems that increase productivity, and/or reorganize your whole outfit so it can still do what it already does, just better and faster. This has been huge for us. My lack of ability as a CEO in the beginning really showed up in this. Here I am a trader, coach, leader, ceo I was holding a lot of hats. But I had no clue how to prioritize or delegate anything in a proper manner. We would have million dollar business ideas get lost in threads of emails that were 100 emails long! Then it would move to the bottom of the pile as we put our next fire or try a new idea. Putting in systems for everything we do and utilizing proper technology let us chop hours off what we did every single day.
6. Encourage Competitiveness
A healthy amount of competition can lead to great innovations and accomplishments. So rally your team by encouraging them to outpace your main competitor in the market, or setup monthly prizes for the workers who gather the most sales or complete the most work; just give them something more to work toward other than plain completion.
In fact, Carnegie was known for rewarding his workers with more pay and better positions in his steel company if they ever figured out better ways to save his company money. Odds are that your employees would appreciate a similar opportunity as well.
7. Remain Flexible
Smart leaders try to predict where their companies or markets will be so that they can, more often than not, motivate changes rather than react to them. By remaining flexible, they position themselves to maximize on these changes, while also retaining the ability to reflect and pivot if their predictions should prove false. Guys this is an ever changing market and when your good at something everyone copies you. When we started to really grow our model of how we marketed to the type of classes we did it all got copied. That's totally fine and a complement but you have to know in this age you only get a few months head start before the copycats are out. You need to constantly innovate and improve. You need to be flexible and admit when your on the wrong path and pivot quickly to the right one.
8. Ask the Right Questions, and Give the Right Answers
Great business leaders get to the root of a problem quickly, and then work hard alongside those whom are helping them to solve it. They never beat around the bush with their questions or answers, as they know that money is being lost every minute something is awry.
9. Retain Focus
As a leader, you’ll have to keep your eye simultaneously on the many moving parts of the company. But a great leader has selective tunnel vision – they can hone in on one thing at a time – while also keeping the larger picture in mind. As Thomas Edison once said, “Vision without execution is hallucination,” and you can’t run a business on vision alone. This is huge. All day I am talking with my guys about our Vision our strategic objective. They get so sick of hearing it but its so important. Everything we do, everything we build, every action we take should be with the expectation that this gets us to our strategic objective.
We have a slogan that we say all day everyday “ONE TEAM, ONE DREAM” we chant this all day to refocus us so that when times get tough we remember who we are and why we are doing this.
10. Embrace Failure
Have courage, tenacity, and patience when trying out new ideas. Inevitably, some of them will fail, but know that greatness and great learning often come from making mistakes. While it’s easier to always walk the known, safe path, it rarely ever leads to great fortune and opportunity.
11. Make Your Own Luck
All great businesspeople know that luck is a rare thing, if it exists at all. Rather, they work hard and set themselves up for success. These folks prime themselves to leap on great opportunities whenever they come near instead of sitting idle and hoping that the perfect opportunity will magically present itself out of nowhere and ask no work of them.
12. Remain Passionate
Passion doesn't simply arise from money or maximized profits. It’s important to keep the fire in your gut burning as, without passion or purpose, you can become complacent, and complacency kills both individuals and businesses. As Simon Sinek constantly repeats throughout his TED Talk, “People don’t buy what you do; they buy why you do it,” so always be communicating that passion to your customers in everything you do.
“skills are cheap, passion is priceless” I read that in the book CRUSH IT . It is so true and guides all my hiring and partnership decisions. I believe I can teach anyone almost anything about this business. But what I cant teach is the passion. I have so much that it will rub off on you but you still need it in your bones! It drives you to stay awake and push at all times.
13. Save Some Time for Personal Development
Every great man and woman in history, even those outside of the business world, always made sure to save time to do one personal thing every day.
Whether it was to read a book not in their field, write poetry, run a marathon, or learn how to bake, these leaders would also strive to improve themselves beyond their expected fields of expertise.
Inspiration comes from within, and from the things you love doing, not just the things you get paid to do professionally, so remember to be a well-rounded person who has a life beyond the workplace.
Being great is a process and a commitment. Consider the points listed above and set a course for greatness in your work and personal life.
Extracted article from http://beforeitsnews.com/
Whether they were old world titans of industry and invention – such as John D. Rockefeller, Dale Carnegie, J.P. Morgan, Thomas Edison, Henry Ford, and Cornelius Vanderbilt – or are the new world titans of technology – such as Steve Jobs, Bill Gates, Jeff Bezos, Mark Zuckerberg – they all positioned themselves to see or predict issues in the (coming) world, and then went about solving those problems.
Regardless of the eras into which these individuals were born, they were bound to make waves of change in the modern world, so let’s dig deeper into what traits made them great so that you may one day join their ranks.
1. Take Responsibility
At the end of the day, everything your company does – good or bad – reflects on you as its leader. So whenever something goes awry, lead by example and be accountable for the mistakes and proactive about fixing them.
In addition, whenever your company does something right, take pride in it collectively and give honest accolades individually to the members of your team whom contributed to this success. Showing your humility lets your employees know that they are valued and that you recognize you can’t go it alone. This one took me a bit of time! As a trader I am a certified egomaniac and that makes me great..I truly believe I own the market and it bends to my whims when I am on my game. As a leader this type of behaviour will cause a fragmented team you will not be able to guide people to their full potential unless you can make them a partner in your vision.
2. Communicate Effectively
One of the most valuable traits of a business leader is his or her ability to communicate well with anyone, be it his or her superiors, equals, employees, partners, or competitors.
All of these folks need information from you, and if you can give it to them quickly and effectively, you’ll save everyone a lot of headaches and wasted time. You’ll also have a lot of things to communicate non-verbally – such as your strength as a leader, your personal character, and your mission – so keep in mind that communication is not solely limited to the transaction of words. This one was really hard for me. I am a great salesman and so I thought that made me a great communicator in our company but it didn't. I always expected people to work at my pace and my speed and do things the way I wanted but I was never able to relay how and why that is important. Then when things would fall behind or apart I would get angry. This was because I had no properly relayed my vision for how I saw our future and how we were gonna get there together. Once I showed my team what my vision was and had them pitch in to really turn it into a strategic objective our company took off.
3. Demand Quality
Demand good work from your employees work as well as from yourself. The fact that you hold yourself to high standards will encourage your employees to do the same, especially if they know that you don’t tolerate sub-par work from anyone. Additionally, always be serving something of value to your customers and they’ll keep coming back for that quality product. This is huge I am very hard on myself to turn out great work and make great trades and teach great classes. In our company we even keep track of metrics so that the team can see how well I am doing my functions. We manage results not personalities & people. This takes the politics out of things and makes us into a cohesive and productive team.
4. Value Consistency
Whether it means being punctual for every meeting, showing up early for work every day, or always hitting product deadlines, the fact that you and your company can get work done on a regular basis makes you an asset.
While the flashy worker on your team who always appears to do good work, it’s the dependable and consistent workers who keep the world turning. When you’re reliable, you’re useful, and then you’re useful, you’re valued.
5. Require Efficiency
Bloated and starving workplaces eventually start cutting into profits. So, adopt lean methodologies; trim the fat from the organization to morph it into a machine running on full-steam.
Don’t be afraid to replace the employee who’s dragging the team down with their procrastinating, Implement new systems that increase productivity, and/or reorganize your whole outfit so it can still do what it already does, just better and faster. This has been huge for us. My lack of ability as a CEO in the beginning really showed up in this. Here I am a trader, coach, leader, ceo I was holding a lot of hats. But I had no clue how to prioritize or delegate anything in a proper manner. We would have million dollar business ideas get lost in threads of emails that were 100 emails long! Then it would move to the bottom of the pile as we put our next fire or try a new idea. Putting in systems for everything we do and utilizing proper technology let us chop hours off what we did every single day.
6. Encourage Competitiveness
A healthy amount of competition can lead to great innovations and accomplishments. So rally your team by encouraging them to outpace your main competitor in the market, or setup monthly prizes for the workers who gather the most sales or complete the most work; just give them something more to work toward other than plain completion.
In fact, Carnegie was known for rewarding his workers with more pay and better positions in his steel company if they ever figured out better ways to save his company money. Odds are that your employees would appreciate a similar opportunity as well.
7. Remain Flexible
Smart leaders try to predict where their companies or markets will be so that they can, more often than not, motivate changes rather than react to them. By remaining flexible, they position themselves to maximize on these changes, while also retaining the ability to reflect and pivot if their predictions should prove false. Guys this is an ever changing market and when your good at something everyone copies you. When we started to really grow our model of how we marketed to the type of classes we did it all got copied. That's totally fine and a complement but you have to know in this age you only get a few months head start before the copycats are out. You need to constantly innovate and improve. You need to be flexible and admit when your on the wrong path and pivot quickly to the right one.
8. Ask the Right Questions, and Give the Right Answers
Great business leaders get to the root of a problem quickly, and then work hard alongside those whom are helping them to solve it. They never beat around the bush with their questions or answers, as they know that money is being lost every minute something is awry.
9. Retain Focus
As a leader, you’ll have to keep your eye simultaneously on the many moving parts of the company. But a great leader has selective tunnel vision – they can hone in on one thing at a time – while also keeping the larger picture in mind. As Thomas Edison once said, “Vision without execution is hallucination,” and you can’t run a business on vision alone. This is huge. All day I am talking with my guys about our Vision our strategic objective. They get so sick of hearing it but its so important. Everything we do, everything we build, every action we take should be with the expectation that this gets us to our strategic objective.
We have a slogan that we say all day everyday “ONE TEAM, ONE DREAM” we chant this all day to refocus us so that when times get tough we remember who we are and why we are doing this.
10. Embrace Failure
Have courage, tenacity, and patience when trying out new ideas. Inevitably, some of them will fail, but know that greatness and great learning often come from making mistakes. While it’s easier to always walk the known, safe path, it rarely ever leads to great fortune and opportunity.
11. Make Your Own Luck
All great businesspeople know that luck is a rare thing, if it exists at all. Rather, they work hard and set themselves up for success. These folks prime themselves to leap on great opportunities whenever they come near instead of sitting idle and hoping that the perfect opportunity will magically present itself out of nowhere and ask no work of them.
12. Remain Passionate
Passion doesn't simply arise from money or maximized profits. It’s important to keep the fire in your gut burning as, without passion or purpose, you can become complacent, and complacency kills both individuals and businesses. As Simon Sinek constantly repeats throughout his TED Talk, “People don’t buy what you do; they buy why you do it,” so always be communicating that passion to your customers in everything you do.
“skills are cheap, passion is priceless” I read that in the book CRUSH IT . It is so true and guides all my hiring and partnership decisions. I believe I can teach anyone almost anything about this business. But what I cant teach is the passion. I have so much that it will rub off on you but you still need it in your bones! It drives you to stay awake and push at all times.
13. Save Some Time for Personal Development
Every great man and woman in history, even those outside of the business world, always made sure to save time to do one personal thing every day.
Whether it was to read a book not in their field, write poetry, run a marathon, or learn how to bake, these leaders would also strive to improve themselves beyond their expected fields of expertise.
Inspiration comes from within, and from the things you love doing, not just the things you get paid to do professionally, so remember to be a well-rounded person who has a life beyond the workplace.
Being great is a process and a commitment. Consider the points listed above and set a course for greatness in your work and personal life.
Extracted article from http://beforeitsnews.com/
Saturday, 12 June 2021
Life Wisdom - Universal Laws of Success
(1) Law of LOVE - It says in essence - "LOVE ALL PEOPLE AS YOURSELF". All other rules are subordinate to this one Law - they must NOT conflict with it. It's biblical. It applies to everything we do - as individuals - families - business teams - organizations - countries. It is Global in its reach.
(2) Law of CAUSE & EFFECT - This is an orderly universe. There are no accidents. Everything happens for a reason. For every effect there's a cause or a set of causes.
(3) Law of MIND - Thoughts objectify themselves. We 'become' what we 'think about'.
(4) Law of MENTAL EQUIVALENCY - To achieve success in any area, we must have a 'clear image' of that success in our mind a mental picture of our idea of success - a vision.
(5) Law of CORRESPONDENCE - Our outer life will mirror our 'inner' life. There is a 'direct correspondence' between our experiences and our thoughts and attitudes.
(2) Law of CAUSE & EFFECT - This is an orderly universe. There are no accidents. Everything happens for a reason. For every effect there's a cause or a set of causes.
(3) Law of MIND - Thoughts objectify themselves. We 'become' what we 'think about'.
(4) Law of MENTAL EQUIVALENCY - To achieve success in any area, we must have a 'clear image' of that success in our mind a mental picture of our idea of success - a vision.
(5) Law of CORRESPONDENCE - Our outer life will mirror our 'inner' life. There is a 'direct correspondence' between our experiences and our thoughts and attitudes.
Quote for the day
"All our dream can come true, if we have the courage to pursue them." - Walt Disney
Friday, 11 June 2021
Thursday, 10 June 2021
Quote for the day
"Courage is not having the strength to go on; it is going on when you don't have the strength." - Theodore Roosevelt
Wednesday, 9 June 2021
Quote for the day
"Riches get their value from the mind of the possessor; they are blessings to those who know how to use them, and curses to those who do not." - Terence
Tuesday, 8 June 2021
Quote for the day
"Through perseverance many people win success out of what seemed destined to be certain failure." - Benjamin Disraeli
Monday, 7 June 2021
Quote for the day
"A failure is not always a mistake. It may simply be the best one can do under the circumstances. The real mistake is to stop trying." - B.F. Skinner
Sunday, 6 June 2021
Mourinho’s simple seven-point plan for winning big games (Applied to trading)
Football’s 7 point plan can be applied to trading.
1) The game is won by the team who commits fewer errors. (Trader who commits few error wins)
2) Football favours whoever provokes more errors in the opposition.
(Longer the trend higher is the chance of a fade of new highs/lows)
3) Away from home, instead of trying to be superior to the opposition, it’s better to encourage their mistakes.
(When capitalizing opportunities outside one’s expertise/skill set its usually a good call to follow superior risk management controls)
4) Whoever has the ball is more likely to make a mistake.
(More trades one makes ,more mistakes one can make by over trading)
5) Whoever renounces possession reduces the possibility of making a mistake.
(Anticipating trends rather than following trends aka contrarians have lower risk/higher reward)
6) Whoever has the ball has fear.
(After putting on a trade emotions are evoked)
7) Whoever does not have it is thereby stronger.
(Be selective in trades, avoid lower probability trades)
1) The game is won by the team who commits fewer errors. (Trader who commits few error wins)
2) Football favours whoever provokes more errors in the opposition.
(Longer the trend higher is the chance of a fade of new highs/lows)
3) Away from home, instead of trying to be superior to the opposition, it’s better to encourage their mistakes.
(When capitalizing opportunities outside one’s expertise/skill set its usually a good call to follow superior risk management controls)
4) Whoever has the ball is more likely to make a mistake.
(More trades one makes ,more mistakes one can make by over trading)
5) Whoever renounces possession reduces the possibility of making a mistake.
(Anticipating trends rather than following trends aka contrarians have lower risk/higher reward)
6) Whoever has the ball has fear.
(After putting on a trade emotions are evoked)
7) Whoever does not have it is thereby stronger.
(Be selective in trades, avoid lower probability trades)
Source: www.newtraderu.com
Quote for the day
"Your rewards in life will be determined by what you do, how well you do it, and the difficulty of replacing you." - Brian Tracy
Saturday, 5 June 2021
8 Signs You're Investing Like Buffett
Value investing is an approach, a style of investing. It is not a set of formulas that allows you to beat the market. Value investors, like Warren Buffett, are prudent in their approach looking for good investments at a reduced price.
Value investors believe they are buying a business. If you went into business for yourself, you would look at many options and select the one that had the best prospects at a reasonable price. No sense committing your hard earned money to something that costs too much.
How do you know you would be a good value investor? Ask yourself if any of these characteristics describe you.
I'm business oriented. Do you like to understand how a business works? Can you describe to your better half why this company is the best one to place you money, and do you believe yourself when you explain it?
I love hunting for bargains. Do you check out the price at several stores before making a purchase? When shopping for a hotel, do you look for what kind of deals you can get before making a reservation? If you compare the price on anything you buy, you might be value investor.
I like crunching numbers. You like the simple maths that explains the fundamentals of the business. You want to compare the numbers of the companies you like to see the ones that offer the best opportunity. This does not mean you are mathematician, just someone who recognizes that the numbers tell the story.
I prefer to factor in a margin of safety. When you received your first credit card, you avoided carrying it for more than a year. The car you buy is rated the safest around. When you buy a stock you want to be sure it is at a low point.
I trust myself. While analyst reports are nice and can help to identify opportunities, you prefer to make up your own mind because you know analysts can have their own agenda. You like to gain a level of comfort that whatever you buy is the best possible option out there. The same applies to the companies you consider for investment.
I don't mind going against the grain. From experience, you find it is better not to follow the latest popular thing. Being a contrarian means you look for what is not in vogue now, but offers significant value. You know that it's unlikely the popular stocks are bargains.
I like to put together checklists. You find yourself making lists to be sure you get all that needs to be done accomplished. Checklists make your life easier. Value investors like to follow a checklist when they review a company. While a company may not match up perfectly on each item, you go through the process to help make the best decision with the available information.
I can patiently wait for the best opportunity. You don't mind waiting for the best opportunity to show itself. That doesn't mean you sit around watching TV, hoping a great investment falls into your lap. You are out actively looking for what you want. You just do not jump at the first potential opportunity that comes along. Value investors work hard while they wait for the right company to arrive at the right price. Once it does, they pounce. Then they are patient for the opportunity to bear fruit. However, if the market and the company proves their analysis wrong, they implement their pre-existing exit strategy and get out of the deal.
Good value investors tend to have most, if not all of these traits. If several of these characteristics fit you then you are ready to be a value investor. Source: http://www.investinganswers.com/
Value investors believe they are buying a business. If you went into business for yourself, you would look at many options and select the one that had the best prospects at a reasonable price. No sense committing your hard earned money to something that costs too much.
How do you know you would be a good value investor? Ask yourself if any of these characteristics describe you.
I'm business oriented. Do you like to understand how a business works? Can you describe to your better half why this company is the best one to place you money, and do you believe yourself when you explain it?
I love hunting for bargains. Do you check out the price at several stores before making a purchase? When shopping for a hotel, do you look for what kind of deals you can get before making a reservation? If you compare the price on anything you buy, you might be value investor.
I like crunching numbers. You like the simple maths that explains the fundamentals of the business. You want to compare the numbers of the companies you like to see the ones that offer the best opportunity. This does not mean you are mathematician, just someone who recognizes that the numbers tell the story.
I prefer to factor in a margin of safety. When you received your first credit card, you avoided carrying it for more than a year. The car you buy is rated the safest around. When you buy a stock you want to be sure it is at a low point.
I trust myself. While analyst reports are nice and can help to identify opportunities, you prefer to make up your own mind because you know analysts can have their own agenda. You like to gain a level of comfort that whatever you buy is the best possible option out there. The same applies to the companies you consider for investment.
I don't mind going against the grain. From experience, you find it is better not to follow the latest popular thing. Being a contrarian means you look for what is not in vogue now, but offers significant value. You know that it's unlikely the popular stocks are bargains.
I like to put together checklists. You find yourself making lists to be sure you get all that needs to be done accomplished. Checklists make your life easier. Value investors like to follow a checklist when they review a company. While a company may not match up perfectly on each item, you go through the process to help make the best decision with the available information.
I can patiently wait for the best opportunity. You don't mind waiting for the best opportunity to show itself. That doesn't mean you sit around watching TV, hoping a great investment falls into your lap. You are out actively looking for what you want. You just do not jump at the first potential opportunity that comes along. Value investors work hard while they wait for the right company to arrive at the right price. Once it does, they pounce. Then they are patient for the opportunity to bear fruit. However, if the market and the company proves their analysis wrong, they implement their pre-existing exit strategy and get out of the deal.
Good value investors tend to have most, if not all of these traits. If several of these characteristics fit you then you are ready to be a value investor. Source: http://www.investinganswers.com/
Quote for the day
"The honors and rewards fall to those who show their good qualities in action." - Aristotle
Friday, 4 June 2021
Quote for the day
"Most people struggle financially because they take advice from sales people, not rich people." - Robert Kiyosaki
Thursday, 3 June 2021
Quote for the day
"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." - Sun Tzu
Wednesday, 2 June 2021
Quote for the day
"Luck is merely an illusion, trusted by the ignorant and chased by the foolish." - Timothy Zahn
Tuesday, 1 June 2021
Quote for the day
"This idea of anticipation is key to investing and to business generally. You can't wait for an opportunity to become obvious. You have to think, "Here's what other people and companies have done under certain circumstances. Now, under these new circumstances, how is this management likely to behave?" - Edward Lampert
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