"Don't gamble, but watch for unusual circumstances. Excellent investment opportunities come about when superior businesses experience a one time event that depresses the stock price in relation to its intrinsic value." - Warren Buffett
Sunday, 31 March 2013
Why Being an Investor is an Ideal Career Path
There
are two big decisions that we all make in life; a family life, and a
career path. Personally, I think choosing the right career path is just
as, or more important, than deciding if you want to get married, start a
family, and the what-not. So here’s why I think being an investor is an
ideal career path.
Obviously, you get to work for yourself!
I hate working for others. I absolutely hate it, for two reasons.
1 – You’re not being paid what you’re worth. To make a profit, your employer can’t pay it’s employees what they’re really worth. Let’s put it this way. You’re company has 100 workers, and makes $10 million of profit each year. In order to make a profit, they must pay each employee less than $100,000 a year; less than what they’re truly worth. So if you work for yourself, and make $10 million, every single penny of that $10 million goes to you (except for the costs, of course).
2 – You’re fate is in the hands of others! If you work for others, they can decide at a moment’s notice to fire you. They can fire you during a recession, leaving you destitute. They can raise idiots up the corporate ladder, while hard working decent guys like you are stuck. I hate it when others have control over my future. This is my life, and no idiot is going to decide if I succeed or not. If I fail while working for myself as an investor, at least I can say that I tried my best, and failed with honour. But if I fail because my employer has a bone to pick with me, that’s just plain frustrating, because often times there’s nothing you can do about it.
Freedom to work from wherever you want.
The only tools I have as an investor are a couple of investment books, my laptop, InteractiveBrokers (a trading software on my laptop), Metastock, and the internet. I can choose to work from my house, the library, anywhere I want. I can move to China for 6 months and invest in the American markets from there (ahhhhh, the wonders of modern day technology). I can lounge on the beach, and work on my investments. So what happens if you work for someone else? Can you pack up at a moment’s notice? Probably not. So what happens if you run a brick and mortar business? Can you leave whenever you want? Absolutely not! Who’s going to be around to monitor your business? You’re tied to a physical location. But as an investor, you aren’t tied to any one place.]
Freedom to pack up and take a long vacation any time.
As long as I have the money, I can pack up and go on vacation for as long as I want. If I’m feeling to stressed out, I can shut down my investment positions, tell everyone I’m leaving, tour the world for a few months, then come right back to my investments. It’s a wonderful lifestyle, I tell you! If you’re an employee, your boss will probably fire your ass if you leave for more than a month or two. If you’re a small – medium sized business owner, you’re business will shut down if you leave it for more than 2 weeks! But as an investor, you can close up shop and come back whenever you want. Your investment skills will always be with you, and so will your capital.
Investing is an old man’s game.
In my opinion, working as a pure engineer in the tech industry is a terrible idea. Once you hit 40, you’re competing with guys who are in their 20s that can stay awake on 3 hours of sleep each night and work like they’re demented or something. There’s no way you can compete with them. So let’s face the truth. We’ll all be old one day. So why choose a career where you’re golden age is when you’re 20 or 30 something, and after that , go on a long decline? Choose a profession where experience counts, dammit! In the realm of the financial markets, there is nothing new. There will always be panics, fears, exuberance, bubbles, etc. Once you’ve had enough experience, you know first hand how the future for the markets will play out, because market history repeats itself.
You can go long and short, or choose not to have a position at all.
Most professions get wacked by the economic cycle one way or another. Mass layoffs in some industries during recessions, and mass layoffs in other industries in prosperous times. One cannot switch professions all the time; you can’t just jump ship to the hottest industry that’s hiring like crazy whenever you feel like it. As a business owner, you can’t profit from both good and poor economic times. A business is a slow, lumbering ship. You can’t turn 180 degrees at an instant’s notice. You can’t close down your business if you foresee bad economic clouds coming, and reopen when things are all better. But as an investor, you can change from 100% long to 100% short. Or, if you’re confused, you can close down all your positions, and choose to simply conserve cash. As an investor, you get the benefit of DOING NOTHING if you want. If a business does nothing (and doesn’t continue it’s cash flow), it will go bankrupt. If an employee does nothing, he or she will be fired, and likely be incapable of making ends meet at home. But as an investor, you have the benefit of waiting for the right opportunity.
All knowledge can be used.
If you’ve seen the Turtle Trader, you’ll notice that many successful investors didn’t start off as an investor. Many were formers soldiers, plumbers, chess players, soccer players, programmers, etc. Nothing goes unused in the realm of investments.
You develop a clearer view of the world.
A big part of investing, obviously, is knowing what’s going on in this world (which grows your ability to predict the future). You don’t want to be poor Joe down there who works 9-5, lives an oblivious life, and wonders what the hell’s going on when he gets fired and sees screaming EQUITIES ARE DOOMED headlines in the newspapers one day. I call guys like Joe a fool. They are like the masses – just following the herd to their slaughter. You have three choices in life. Be ahead of the trend, go with the trend, and fall behind the trend. Most successful investors go with the trend (although a few are talented enough to go ahead of the trend). These guys won't be killed too badly when some undesirable, unforeseeable future rears its ugly head. But most people (like Joe), are the obvious kind; behind the trend. These are the guys that get killed really, Really badly.
And last, but not least…..
This should be really obvious. If you're good at investing, you can make millions and billions. But then again, if you're not, then find another profession.
Source:http://investorzblog.com
Obviously, you get to work for yourself!
I hate working for others. I absolutely hate it, for two reasons.
1 – You’re not being paid what you’re worth. To make a profit, your employer can’t pay it’s employees what they’re really worth. Let’s put it this way. You’re company has 100 workers, and makes $10 million of profit each year. In order to make a profit, they must pay each employee less than $100,000 a year; less than what they’re truly worth. So if you work for yourself, and make $10 million, every single penny of that $10 million goes to you (except for the costs, of course).
2 – You’re fate is in the hands of others! If you work for others, they can decide at a moment’s notice to fire you. They can fire you during a recession, leaving you destitute. They can raise idiots up the corporate ladder, while hard working decent guys like you are stuck. I hate it when others have control over my future. This is my life, and no idiot is going to decide if I succeed or not. If I fail while working for myself as an investor, at least I can say that I tried my best, and failed with honour. But if I fail because my employer has a bone to pick with me, that’s just plain frustrating, because often times there’s nothing you can do about it.
Freedom to work from wherever you want.
The only tools I have as an investor are a couple of investment books, my laptop, InteractiveBrokers (a trading software on my laptop), Metastock, and the internet. I can choose to work from my house, the library, anywhere I want. I can move to China for 6 months and invest in the American markets from there (ahhhhh, the wonders of modern day technology). I can lounge on the beach, and work on my investments. So what happens if you work for someone else? Can you pack up at a moment’s notice? Probably not. So what happens if you run a brick and mortar business? Can you leave whenever you want? Absolutely not! Who’s going to be around to monitor your business? You’re tied to a physical location. But as an investor, you aren’t tied to any one place.]
Freedom to pack up and take a long vacation any time.
As long as I have the money, I can pack up and go on vacation for as long as I want. If I’m feeling to stressed out, I can shut down my investment positions, tell everyone I’m leaving, tour the world for a few months, then come right back to my investments. It’s a wonderful lifestyle, I tell you! If you’re an employee, your boss will probably fire your ass if you leave for more than a month or two. If you’re a small – medium sized business owner, you’re business will shut down if you leave it for more than 2 weeks! But as an investor, you can close up shop and come back whenever you want. Your investment skills will always be with you, and so will your capital.
Investing is an old man’s game.
In my opinion, working as a pure engineer in the tech industry is a terrible idea. Once you hit 40, you’re competing with guys who are in their 20s that can stay awake on 3 hours of sleep each night and work like they’re demented or something. There’s no way you can compete with them. So let’s face the truth. We’ll all be old one day. So why choose a career where you’re golden age is when you’re 20 or 30 something, and after that , go on a long decline? Choose a profession where experience counts, dammit! In the realm of the financial markets, there is nothing new. There will always be panics, fears, exuberance, bubbles, etc. Once you’ve had enough experience, you know first hand how the future for the markets will play out, because market history repeats itself.
You can go long and short, or choose not to have a position at all.
Most professions get wacked by the economic cycle one way or another. Mass layoffs in some industries during recessions, and mass layoffs in other industries in prosperous times. One cannot switch professions all the time; you can’t just jump ship to the hottest industry that’s hiring like crazy whenever you feel like it. As a business owner, you can’t profit from both good and poor economic times. A business is a slow, lumbering ship. You can’t turn 180 degrees at an instant’s notice. You can’t close down your business if you foresee bad economic clouds coming, and reopen when things are all better. But as an investor, you can change from 100% long to 100% short. Or, if you’re confused, you can close down all your positions, and choose to simply conserve cash. As an investor, you get the benefit of DOING NOTHING if you want. If a business does nothing (and doesn’t continue it’s cash flow), it will go bankrupt. If an employee does nothing, he or she will be fired, and likely be incapable of making ends meet at home. But as an investor, you have the benefit of waiting for the right opportunity.
All knowledge can be used.
If you’ve seen the Turtle Trader, you’ll notice that many successful investors didn’t start off as an investor. Many were formers soldiers, plumbers, chess players, soccer players, programmers, etc. Nothing goes unused in the realm of investments.
You develop a clearer view of the world.
A big part of investing, obviously, is knowing what’s going on in this world (which grows your ability to predict the future). You don’t want to be poor Joe down there who works 9-5, lives an oblivious life, and wonders what the hell’s going on when he gets fired and sees screaming EQUITIES ARE DOOMED headlines in the newspapers one day. I call guys like Joe a fool. They are like the masses – just following the herd to their slaughter. You have three choices in life. Be ahead of the trend, go with the trend, and fall behind the trend. Most successful investors go with the trend (although a few are talented enough to go ahead of the trend). These guys won't be killed too badly when some undesirable, unforeseeable future rears its ugly head. But most people (like Joe), are the obvious kind; behind the trend. These are the guys that get killed really, Really badly.
And last, but not least…..
This should be really obvious. If you're good at investing, you can make millions and billions. But then again, if you're not, then find another profession.
Source:http://investorzblog.com
Saturday, 30 March 2013
Quote for the day
"At some point in a business cycle one has to get greedy. And the time to get greedy is when everybody’s running for the hills with fear." - Bruce Berkowitz
Thursday, 28 March 2013
Investor interest shifting toward low risk counters.....
The week concluded with firm interest on blue chips with
both indices dipping marginally week on week. The All Share Price Index lost
33.2 points to close at 5,735.7 points (-0.6% WoW), while the S&P SL20 index
fell 19.1 points to close at 3,293.6 points (-0.6% WoW). The ASI fell mainly on
the back of the losses made by Ceylon Tobacco (-2.1% WoW), Bukit Darah (-2.0%
WoW), Sampath Bank (-2.6% WoW), Carsons Cumberbatch (-1.1% WoW) and Peoples
Leasing & Finance (- 4.4% WoW).
Conclusion:
The dip in both indexes during the week can also be
attributed to the shift in investor interest from counters with moderate growth
prospects towards fundamentally strong blue chip stocks with higher growth
prospects. It is notable that Banking and Diversified sectors have emerged as
the key growth drivers of the Colombo bourse marked by foreign as well as local
interest on key counters such as John Keels Holdings, Commercial Bank, Hatton
National Bank and National Development Bank. The relatively higher interest on
fundamentally strong counters by both retail and high net worth participants
indicates a general change in the level of risk appetite within the market.
This demonstrates a shift of investor interest towards low risk and
fundamentally strong growth stocks that may serve the purpose of a safe haven investment
at a time where the overall direction of the economy is being reassessed by
market forces. We are of the view that these significant changes in market
behaviour indicates that the Stock Exchange is maturing in terms of its level
of responsiveness to general economic conditions.
Commercial Bank backed by both large scale and retail
investors emerged as the main contributor to the turnover during the week
adding circa 20% to the total turnover. Further, Sampath Bank, John Keels
Holdings and National Development Bank together contributed circa 40% to the
weekly turnover demonstrating the major involvement by selected large cap counters
in raising turnover levels in the Colombo Bourse.
Meanwhile, Bank, Finance & Insurance sector counters
attracted heavy investor interest during the week with sector contributing
circa 53% to the weekly turnover. On the other hand, Diversified sector driven
by the crossings pertaining to John Keels Holdings chipped in with a 16%
contribution to the total weekly turnover. Hence Bank, Finance & Insurance sector
and Diversified Sector led the investments spree during the week with a
cumulative contribution of circa 70% to the total turnover.
Top contributors to the weekly volume were Asia Siyaka
Commodities, Commercial Leasing & Finance, PC House, Commercial Bank and Expo
Lanka Holdings .The average daily turnover for the week was LKR 1,110.3 mn up
57.5%WoW whilst the average daily volume was 66.3 mn shares.
Significant foreign investor interest was observed over the
week with foreign purchases amounting to LKR 1,204.2 mn, whilst foreign sales
amounted to LKR 728.1 mn. Market capitalisation stood at LKR 2,205.1 bn, and
the YTD performance is 1.6%.
Institutional and foreign participation keeps the bourse
alive, whilst retailers remain in the side line
The short week’s trading activities at the Colombo bourse
were primarily on a sluggish mode after witnessing a positive momentum during
last week. The bench mark index traded within a very narrow range, to wrap up
the week in red. Retailers were largely adopting a “wait and see” approach
whilst institutional and foreign participation held up the bourse’s
performance. John Keells Holdings continued to be the favourite pick of the
foreign investors, whilst country’s leading banks too grabbed the attention of
high net worth, institutional and foreign investors.
Even though the market activities were lethargic during the
week presumably due to the holiday mood creeping in and the increasing treasury
yields, foreign activity continued to dominate the market with a weekly net
foreign inflow of LKR476mn. It’s noteworthy to mention that the primary reason
behind this is that the Colombo bourse continues to remain as an attractive
frontier market whilst selected blue chip companies future prospectus remains promising.
Further it is noteworthy to mention that Sri Lankan corporate listed debt
market has shown signs of revival following the concessions provided for
corporate bond investments through 2013 budget proposals. Several Banking,
Finance & Insurance sector giants have already taken advantage of this new
development while recently Lion Brewery and Softlogic Holdings have revealed
their plans to raise LKR3bn and LKR750mn respectively through debenture issues.
This would enable firms to borrow at a rate of interest relatively below the
AWLR and more closer to AWFDR depending on the credit rating, allowing firms to
realign their attention towards long term investments and hence further
optimizing the resource allocation of the corporate sector.
Source: ASIA WEALTH MANAGEMENT CO. (PVT) LTD.
Quote for the day
"When everyone believes something is risky, their unwillingness to buy usually reduces it’s price to the point where it’s not risky at all. Broadly negative opinion can make it the least risky thing since all optimism has been driven out of it’s price." - Howard Marks
LSL Market Review 28th Mar 2013
On Thursday, profit taking in the wider market and a marked drop on Sampath Bank upon employee’s share options being exercised brought the indices lower. DFCC hit a 52-week high of Rs. 131.50 amidst an overall surge in most banking counters. Banking counters are sought after as investors view them as stable investments with regular dividends.
ASI dipped 9.31 points (0.16%) to close at 5,735.68 and the S&P SL20 index lost 6.30 points (0.19%) to close at 3,293.57. Turnover was Rs. 2,040.4Mn.
Top contributors to turnover were Commercial Bank with Rs. 614.2Mn, Sampath Bank with Rs. 357.6Mn and Asia Siyaka Commodities with Rs. 278.5Mn. Most active counters for the day were Sampath Bank, Nation Lanka Finance and Commercial Bank.
Notable gainers for the day were Infrastructure Development up by 24.4% to close at Rs. 199.00, Dunamis Capital up by 20.0% to close at Rs. 12.00 and SMB Leasing up by 14.3% to close at Rs. 0.80. Notable losers for the day were PCH Holdings down by 10.0% to close at Rs. 5.40, Galadari Hotels down by 6.9% to close at Rs. 12.20 and HNB Assurance down by 6.7% to close at Rs. 47.70.
Cash map for today was 55.14%. Foreign participation was 30.01% of total market turnover whilst net foreign selling was Rs. 33.77Mn.
Wednesday, 27 March 2013
Quote for the day
"Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In "good times," even errors are profitable; in "bad times" even the most well researched trades go awry. This is the nature of trading; accept it." - Dennis Gartman
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