7.40 am : Good morning, Monday.
Books : I was reading one of the 'financial' book ... a FA book by KC Law. I will share more of the book as I do kinda like the contents ... more into logical sense of investing, using simple fundamental-analysis.
For example : I was reading the topic " WHEN TO BUY" ... and logically it says ... during sharp correction or during 'sales'. Yes ... the dragging CRASH word in our mind, the fear ... and freight. Also ... he said buying during 'tax' time when fund-managers will see and going for long-holiday. That would be around Sept/Oct ... of each year?
It is sensible to say .... buy below the "intrinsic value". But .... what is the intrinsic value of each listed company? Does anyone out there HONESTLY know that figure? Really?
Yes ... we learnt about DCF ... based on previous data/figures. Is it sustainable in such econ-environment where globalisation is the whole new spectrum for all biz? Are the projection accurate or of any valid justification? Markets do not make senses ... that is for sure. So ... we do want to buy the stocks at huge 'margin of safety' ... so, it is logical.
In theory, yes. In practical ... it is totally a different scenario.
What we read and we know is called knowledge. Knowledge is NOT power ... coming from a teacher.
APPLLIED knowledge is power. We do not need to know the whole book ... but those BASIC knowledge of FA and TA is sufficiently enough for a person to do VERY well in investing/trading.
While I do and will still check those ratios, over-analysing will paralyse us, actually. Markets always over-react ... it is more of psychological analysis ... EA(emotional analysis) taking a huge part of being a great investor!!
Everyone will like to equate their system to Warren Buffett. Thousands of people following every steps of WB ... his buying and selling (recently, WB bought AAPL, fyi). But ... how many of them becoming even near to his performance? We are talking about holding-forever here?
Nevertheless ... the FA book is very good for novice like me, to understand biz-analysis slightly better. Balance-sheets and cash-flow statements are important to check on the health of the companies ... but the understanding of the operational of the biz (street smart too) is equally important.
FOCUS ... into WHEN to BUY?
Remember Mr T ... the experienced investor I mentioned? I sms-ed him and asked his opinion of the book ... all FA analysis book since he is a fundamentalist and profited very well from stock-markets over years.
Mr T : No sifu/guru will share their earning money secrets ... example Li-KaShing or WB.
Hmm ... I guess what he meant was ... if it is THAT easy to get rich or done well in investing or trading, then ... they do NOT need to write a book, right?
Have you ever wonder WHY would these author write books about investing or trading? If they have successfully able to earn huge amount of money, why write books? I did ... I asked myself these LOGICAL question before ... while virtually EVERYONE could write a book (one may even attend a writing-book workshop) ... not everyone could do what is written, right?
THEORIES are not equate to PRACTICAL.
I should know .... because some suggested that I could write a book some years ago ... and now, I got to know few local authors and I still respect them highly ... I guess it is due to our education system, moulding us to believe that ... hey, he could write a BOOK ... about trading or investing, he MUST be very good or successful. Wow.
That is mis-leading, my friend. I should know again ... as I have attended few book-writing and inside author circle. Some really like to write .... and share their knowledge, research ... and getting their NAMES to be known. It is a proud moment, you know ... seeing your name in print and many people queueing up for your signature!!
Truth has never been reveal ... authors earn 10% of the sales ... for every RM40 book, the author pocketing RM4 and ... err ... in Malaysia(a non-reading community), it is really difficult to hit 50k copies of sales, RM40 x 50, 000 = RM2,000,000. So ... the author to get RM200k. WOW ...
Remember ... do buy books, original ones instead of photocopy. READ as much of these books ... I personally prefer LOCAL (Msia or Spore) authors ...
I will continue to promote books as that is the BEST reference to most newbies/novices ... I have gained much of my limited knowledge thru books. It is not have many books we have, how many books we read ... or amount of contents we understood.
It is the APLICATIONS of those knowledge ...
The experienced investors and traders ... understand that. And let me assure newbie-readers, stock-markets or any financial markets ... goes WAY BEYOND things we read from books, media-prints or things we heard.
More posts to come ... as I m back to blogging.
Have nice RED day ahead. I m wearing RED T-shirt.