Friday, February 3, 2012

Play to WIN!

salam folks,

1. finally, i'm now connected to internet, after barely a week living "offline!" nowadays, being able to go online isn't a privilege but a must! only God knows, how many opportunities i had missed for this whole week

2. anyway, for this entry, i'd like to share some tips i've learnt from my good buddy this week. to make things easier/simpler/more readable, let me put them in bullet form. so, the lessons (which i believe are important, and hence worth to be shared) are as follows:

  • LESSON#1: when it comes to investing, everybody must have a right mindset, which is "INVEST TO WIN"
    • i used to think that investing is sorta hedging my money from inflation. this means, my investing strategy is to find any unit trust, that can promise me higher ROI (return of investment) as compared to inflation rate
      • e.g. let's assume that inflation rate increases 3% annually. so, by rights, any unit trust that offers  >3% annual ROI is sufficient.
    • plus, since i didn't invest to win, i was more risk-averse. i prefer to dump my money on any unit trust that can pay consistently high annual dividend. this is a def a mistake..but why? normally, if you never tried to break from your safe zone, u'd end up nothing! 
  • LESSON#2: nowadays, there's no such "FREE LUNCH"
    • if you're a business major, u, for sure, know about this -"i'll give you something for something!"
    • seeking advice from your parents/immediate family in regards to investing is a mistake - parents normally try to protect you from any, u'd end up in the same loop - "safe loop"
    • yeah, nowadays, u can easily find many "winning" tips in internet, which most of them looks real. the first thing you should ask is whether the person is rich or not..if not, then, (s)he is just bullshitting you! if the tips are damn good, why (s)he doesn't apply them in the first place and become rich, right? make sense?
  • LESSON#3: there's no such "SMOOTH RIDING" in today's life
    • as an engineer, i personally prefer graph, table, or any sorts of other words, no data, no talk! as much as this philosophy is great in term of work, it's not necessary right when it comes to investment. why? simple - men are matter how many data you have, or how good the pattern is, men's behavior is simply unpredictable, especially the investors..they like speculation..and the worst, they make decision based on it..
    • so, the right way to find your best equity is to go for fundamental analysis - you should understand their business models, their management teams, their financial track record for past few years, industry there're involved in, and other words, you should know everything about them..but, this is, of course, a tedious work..nobody likes it..
    • then, when you decide your best equity, have faith on them..don't expect them to perform all the any business cycle, there're ups and, don't expect to have a smooth riding in this world since there's none!
  • LESSON#4: let's do it!
    • the first step is always the, create your inner circle..normally, working in a group is much easier than to be "one-man" show.
    • for fresh grads, this is the best time to start...why? because you don't have responsibility yet! when u have a wife or kids, things would be a bit more difficult to begin! so, let's START now!

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