Saturday, August 07, 2010

Here are the simple investment rules that all SHREWD investors understand and follow.

Rule #1: It’s your money. Period. No one else will take care of it as you will. No advisor, no friend, no relative can possibly be as interested as you in the success of your portfolio. It’s your job to make sure you know where and how it is being invested.

If you don’t think you have the time, temperament and training you’re wrong. Most investors spend more time researching the next toy they are going to buy than the investments in their portfolio.

TEH : I fully agreed with the RULE #1. Many investors in markets DO NOT do any much research on the particular stock they are buying, but more BUSY and interested with the toys they are going to buy. For example, if you ask them about their handphones, they could elaborate in details about the features and cool tricks to gain attention!! I have know SO MANY who bought a counter without much knowledge. It is based on hear-say.

Oh yes, the BEAUTY of TA is that you DO NOT need to know about the tedious work on its fundamentals. If the CHARTS show a buy signal, BUY n for short-term and sell when it reverses. It is about TIMING your entry and exit. Because VOLUMES needed for confirmation, normally it will be those small punting-stocks. I repeat, we do not care whether the company is making a loss or who cares who head the company or their business is about. THIS IS TA. Fully based on chart, buy a stock that we PREDICT might move soon, based on charts. You do not need to know what KAWAN is doing as he is our friend. We do not need to know what sector SUPER in, as it will do superbly when the signals are there.

Rule #2: Learn to invest your forecasts. I’ve talked to many investors who have been very accurate in their forecasts about the economy and where it’s heading. But as the economy does as they say they complain that their investment portfolios are underperforming. Then I find out their portfolios are not invested according to their forecast. I’m sure they are smart, intelligent people (many I know are professional investors) but they are not SHREWD investors for they don’t connect the dots.

TEH : In my own forecast, I like ENERGY stocks as I believe crude oil price could only go higher once the economies recover. CHINA is a place where most investors are eyeing as they are still growing!! China overtook US as the main energy user and majority of their population has NOT being consuming YET. So, the huge market in China is undeniable. AUTO industry will be expanding in greater rate and we shall see more Chinese could afford a car or two. That could only create a greater demand in PETROL. When petrol prices shooting higher, green stocks will take the stage. COAL will still remain the main source but speculating into solar or windpowered energy will certainly be there.

So, IF I do not invest according to my forecast, I m breaking the rule #2. I shall say I will go for an auto stock(I will like to grab back Geely) and an oil stock(I still like CNOOC tho it is overvalued now). As for green-stock, I still prefer Windpower rather than Solar. Now besides CWP, I have a choice in LongYuen.

Three main stocks to INVEST due to my forecast, a higher demand of energy/power in China.

Rule #3: Never let your emotions govern your investment decisions. We’ve all done it but you can stop it from ever happening again. You can become The Shrewd Investor.

TEH : Yes, just do our own homework well, shut of the noises around and BELIEVE that 80-90% chances of those are losing money. They go by emotion. I should go against them and making my investment plans clearer.


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