Money and Finance
The following advices come front Alan Haft on an e-book that I obtained titled, You can Never be too Rich.
I strongly believe that gaining knowledge is crucial to any journey.
Anyway, Top 10 Lessons Hollywood teaches us about Investing.
LESSONS
Lesson 1. Diversification is the Key to Success.
Tip: It's impossible to predict which genre will be hot at any given time. Some will win and some will lose, but only one thing remains certain: Reducing risk through diversification always provides the best recipe for success.
Lesson 2. It Doesn't Have to Be Complicated for It to Be Effective
Tip: Learn from E.T the Extra Terrestrial: It's a story about a bunch of kids who help a stranded alien get back home. One sentence, $756 million. How less complicated can it get? You don't need a complicated portfolio.
Lesson 3. It's the Details That Count
Tip: Without checking the facts and having proper knowledge of a certain process, you just pump money inside and find out in the future that you are screwed. Ask questions + read the details.
Lesson 4. Costs Are Critical
Tip: Commision Fees kill returns. The less they take, the more you make.
Lesson 5. Planning is Key
Tip: Without planning, you move your money into risky stuff and see your money down the drain in the blink of an eye in a moment of unluckiness. Success has no shortcuts. Many people want the fast way out. They ask for answers without having the initiative to learn and invest in themselves. (Knowledge is Power)
Lesson 6. Cut the losers, Ride the Winners.
Tip: Self-explanatory. You won't continue investing in a stock that drops constantly.
Lesson 7. Experts focus on Reducing Risk; Novices Focus on Return
Tip: I found this interesting. And surprisingly should be common sense but it never occurred to me. Again, that is why I find reading books like these beneficial. Yes, many of us are focused on returns. But how many of us focus on reducing risk in our portfolio? A portfolio of stocks which pay fantastic dividends but are extremely risky. Is it a good choice?
Lesson 8. Don't Reinvent the Wheel
Tip: Don't change what's proven successful over the years. I'm not entirely sure about this, what do you all think?
Lesson 9. Complacency is the Mother of All Disasters
Lesson 10. Defy Conventional Wisdom and Take Smart Risks
Tip: Again, food for thought.
What do you think?
Off to read the Intelligent Investor! See you all soon :)
Signing off,
Teenage Investor
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- Be Prepared To Lose All Your Money In The Stock Market.
(You can read my post here if you haven't already @ Standard Chartered is closing its' equity business. What a way to start 2015!) Continuing from the events of yesterday, a sudden thought occurred to me. While I was wondering what would...
Money and Finance
Essential Investing Advice You Cannot Afford to Overlook
The following advices come front Alan Haft on an e-book that I obtained titled, You can Never be too Rich.
I strongly believe that gaining knowledge is crucial to any journey.
Anyway, Top 10 Lessons Hollywood teaches us about Investing.
LESSONS
Lesson 1. Diversification is the Key to Success.
Tip: It's impossible to predict which genre will be hot at any given time. Some will win and some will lose, but only one thing remains certain: Reducing risk through diversification always provides the best recipe for success.
Lesson 2. It Doesn't Have to Be Complicated for It to Be Effective
Tip: Learn from E.T the Extra Terrestrial: It's a story about a bunch of kids who help a stranded alien get back home. One sentence, $756 million. How less complicated can it get? You don't need a complicated portfolio.
Lesson 3. It's the Details That Count
Tip: Without checking the facts and having proper knowledge of a certain process, you just pump money inside and find out in the future that you are screwed. Ask questions + read the details.
Lesson 4. Costs Are Critical
Tip: Commision Fees kill returns. The less they take, the more you make.
Lesson 5. Planning is Key
Tip: Without planning, you move your money into risky stuff and see your money down the drain in the blink of an eye in a moment of unluckiness. Success has no shortcuts. Many people want the fast way out. They ask for answers without having the initiative to learn and invest in themselves. (Knowledge is Power)
Lesson 6. Cut the losers, Ride the Winners.
Tip: Self-explanatory. You won't continue investing in a stock that drops constantly.
Lesson 7. Experts focus on Reducing Risk; Novices Focus on Return
Tip: I found this interesting. And surprisingly should be common sense but it never occurred to me. Again, that is why I find reading books like these beneficial. Yes, many of us are focused on returns. But how many of us focus on reducing risk in our portfolio? A portfolio of stocks which pay fantastic dividends but are extremely risky. Is it a good choice?
Lesson 8. Don't Reinvent the Wheel
Tip: Don't change what's proven successful over the years. I'm not entirely sure about this, what do you all think?
Lesson 9. Complacency is the Mother of All Disasters
Lesson 10. Defy Conventional Wisdom and Take Smart Risks
Tip: Again, food for thought.
What do you think?
Off to read the Intelligent Investor! See you all soon :)
Signing off,
Teenage Investor
- Mohnish Pabrai On Position Sizing
In the UC Davis class discussion, Mohnish Pabrai mentioned how he switched from a 10x10 model of position sizing (10 positions of about 10% each) to a more diversified model after the 2008-2009 crisis. He then went on to discuss how he has switched back...
- Some Investing Advice For My Son
My wife and I recently welcomed our son into the world and, like any new parent, I've been thinking about all the things I'll need to teach him as he grows up -- how to ride a bike, how to read, and, of course, how to invest. So with a few minutes...
- Investing Lessons From David Einhorn
I recently finished reading David Einhorn's Fooling Some of the People All of the Time, which is primarily focused on his hedge fund's (Greenlight Capital) take down of Allied Capital. The Allied Capital case study is a must-read in itself, as...
- What Matters In The Long Run
Here is a guest post from my friend Adrian Lane that shows what long term time horizons can do, how they massively overweight any other single advantage, and a lesson on when to sell: "In the 1990s, working in tech during the great Internet surge, cash...
- Be Prepared To Lose All Your Money In The Stock Market.
(You can read my post here if you haven't already @ Standard Chartered is closing its' equity business. What a way to start 2015!) Continuing from the events of yesterday, a sudden thought occurred to me. While I was wondering what would...