What makes a successful investor? Ability to crunch numbers? a computer can do that. Ability to predict how the market will behave? only a trader needs to worry about that.
What about ability to look at balance sheets, ability to crunch numbers, talk to management sensibly – all put together? Hmmm
Let us face it, very big investing experts have made far more money by charging a fee than by growing their own money! Ken Fisher, George Soros, Mark Mobious – none of them is poor by any standards – in fact 2 of these 3 are in the Fortune top 100.
So let us look at what makes a great investor?
– Surely the ability to crunch numbers: you need to know YOUR portfolio well – why, what price, when you plan to sell, triggers for buying more, or …..etc.
-Humility – the ability to separate the skill from the luck when you have made money in the past
Team work: all these above mentioned people have a lot of help for whatever research, interviews, new skills, etc.
Realising that one theory does not ALWAYS hold – Top Down Approach, Bottom Up Approach, Value Investing, Growth Investing, Diversified portfolio, Concentrated portfolio, Portfolio concentration vs Asset allocation, – all have their proponents and opponents.
Quick trading, day trading, position based trading, long term investing – all are techniques which are similar, but different. At various points in time each one may / may not work for you. Be careful about what you are doing. Do not convert a quick trade to a long term investment JUST because the market went SOUTH.
Keep a diary and learn – it keeps you humble – because there is just too much to learn and remember. When you remember your OWN mistakes, you realize the value of humility.
For John Templeton investing in the emerging markets worked, he also had a diversified portfolio. For Mr. Buffett concentrating on the American markets worked – but remember they were in a different Investment era. So you need to read and assimilate what they said, but do what you have to do. Copy and Paste does not normally work. HOWEVER THE FUNDAMENTALS OF INVESTING does not change.
Investing is the process by which you put money into assets so that you can sell it off at a later date and get a REAL return.
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