Investing - The Basics

[sidney]

After a short <2years in investment + reading books, i started to form my philosophy. I hope it will serve as signpost.

1. TA is weather forecast. You probably go to the beach catch crabs, and before going will check for weather forecast.

2. Fundamental is Shop n Save stocking. Famous amos at 6.50 is fair value. You probably want to buy 1 packet to accompany you during movies. But will likely to buy 2 if offer is at 5.50.

3. Reading journals with stock recommendations are great investing ideas. Most of the time you will lost your positions if you follow the analyst's pick with short term horizon. This is not their stock picking problem. Its user problem. Their job is to write based on buy or sell side. They get paid to write. You get paid only if you position your pickings correctly. You job is to choose not to believe in them.

4. Black swan events are opportunity to make or loss money. If missed out the subprime, another version of financial diaster will surely come. Hopefully, i do not have to wait until grandson pop up.

5. Really, i honestly knew really nothing abt stock markets... The level of confidence i got is initially false sense of marketing materials and reading materials which makes investment easier than 1+1 = 2. Or A to Z. You have to incoporate knowledge abt industry, financial knowhow to read numbers outside ROE and ROA, some balls to make bets, pychology that you are not the lemming, and pray that the management have interigy and do not get into trouble with regulations. The most difficult part is not what you know about.. its what you didn't know...

So, now i got my philosphy, i will fomulate my strategies.

1. Make some effort to understand how weather forecast works.

2. Its good to buy cookies cheap, but make sure they do not expire.

3. Their price predictions will probably come true, if you can wait a 1,000 years.

4. Because we are humans, diaster will come. So do not worry about missing free rides.

5. Primary schooling has already encourage ppl to ask more questions. But you have to learn a little bit more than them.. and act like Da vinci - think.

6. Based on this, my rebate theory still applies. Identify stocks which will outlast your lifespan. Calculate your spending on these companies and then calculate how much holding i need to have in order to breakeven based on my spendings vs their dividend payout.

7. Maybe 1,2 year later i may scold myself stupid for formuating such ideas. I always do. When i read my old diary, i always laugh at myself.

[kennynah]

sydney....nicely written...and i can sense a lot of thought and experience gathered went into formulating your strategies above... good one....

[helios]

Yo Sidney,

Comparing to you, i feel that i am lacking behind you in the learner's approach ...

We believe in the common good. Pick stocks that are not too flamboyant; have an unequivocal stand on who are the more good guys and bad guys out there ... isn't FA practice useful for dating too?

ha ha ...

[sidney]

Hi San, K, Thanks for kind comments.

i believe human learn from experience and mistakes. Sometimes we have learnt the lesson and move on. But sometimes refused to let go, repeat the mistakes and get fustrated. To explain in plain pychology: What is common sense is not common pratice. Its human nature embedded upon us.

And to add to Zig Zigglers' saying: We are born to win, but often we are condition to lose. In love, this is my weakness. I'm working on it. But i guess i can charge San less if you want me for conselling services on love. lol

[Aspellian]

Sidney, Interesting. Keep it up! I have much to learn from you too!
Sharing with you what someone been said to me recently - "Usually the execution of a strategy/plan is the most difficult".

Cheers!

[kennynah]

i would add.... sticking to the initial plan after executive can be even more difficult at times...

[b0rderc0llie]

Hehe, i have no problems executing or sticking to my plan. What requires more effort from me is the formulation of the plan.

[kennynah]

but then once a brilliant plan is conceived....half the battle is won.... u smart fella, as usual....

[sidney]

May i know what is "XXX is an Exempt Fund Manager listed with the Monetary Authority of Singapore"

Does it means this is an hedge fund?

[sidney]

Sidney, Interesting. Keep it up! I have much to learn from you too!
Sharing with you what someone been said to me recently - "Usually the execution of a strategy/plan is the most difficult".

Cheers!

I learnt that once you vested. Your judgement will become impaired if there is detachment, as we wanted to be consistent with our tots, that various reasoning keep on justifying.