Important Principles Concerning Value Investing
TC and Gary Next month, September marks the end of the 4th year of Fisham Group's existence. It's good to reflect on what we have done ... what we have done right; what we have done wrongly. Phillip Securities asked me to give a talk to The American Club a few months ago. I did a write up (see below or attachment) on important principles of value investing we need to follow before our portfolios can grow. Please take a look. Over the course of the next week or so, please prepare a short memo to yourself and using examples of past and previous stocks, reflect on which are the principles you have nof followed (mistakes made) and which are the areas you need to improve or strengthen. It is from such reflecions that we become better investors. Kam wing IMPORTANT PRINCIPLES CONCERNING VALUE INVESTING
(STOCK ACCUMULATION & PORTFOLIO MANAGEMENT)
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These are some important principles that should be followed if we want superior returns for our portfolio through using BAVI (Business approach to Value Investing) 1.BIG RETURNS ARE MADE DOWN THERE.
Big returns are made when stocks go into stage of maximum pessimism and overreaction, after their stock prices have been punished unreasonably. Given time, because of short covering, etc, stocks can go into a strong recovery. John Templeton: I made my fortune down there. 2.FORTIFY YOUR EMOTIONAL FRAMEWORK TO RESPOND RATIONALLY TO IRRATIONAL MARKET BEHAVIOUR. NOT TO SEE THE WORST OUTCOME WHEN A STOCK IS DECLINING BUT RATHER TO SEE A BARGAIN OPPORTUNITY.
The stock market is a whirlpool of strong emotions, affecting our own emotions causing us to make irrational decisions. The first order of business to be a value investor is to get a grip on your emotions and approach collapsing stocks in a calm and measured way.
Buffett: Be greedy when others are fearful; fearful when others are greedy 3.OBTAIN THE LOWEST AVERAGE
(STOCK ACCUMULATION & PORTFOLIO MANAGEMENT)
_____________________________________________________________
These are some important principles that should be followed if we want superior returns for our portfolio through using BAVI (Business approach to Value Investing) 1.BIG RETURNS ARE MADE DOWN THERE.
Big returns are made when stocks go into stage of maximum pessimism and overreaction, after their stock prices have been punished unreasonably. Given time, because of short covering, etc, stocks can go into a strong recovery. John Templeton: I made my fortune down there. 2.FORTIFY YOUR EMOTIONAL FRAMEWORK TO RESPOND RATIONALLY TO IRRATIONAL MARKET BEHAVIOUR. NOT TO SEE THE WORST OUTCOME WHEN A STOCK IS DECLINING BUT RATHER TO SEE A BARGAIN OPPORTUNITY.
The stock market is a whirlpool of strong emotions, affecting our own emotions causing us to make irrational decisions. The first order of business to be a value investor is to get a grip on your emotions and approach collapsing stocks in a calm and measured way.
Buffett: Be greedy when others are fearful; fearful when others are greedy 3.OBTAIN THE LOWEST AVERAGE