The investment marathoner

June 18, 2007 at 11:31 am Leave a comment

The primary goal of a marathoner is to reach the finishing line, winning it is a bonus. Ditto for an investor whose raison d’etre is to preserve the capital and earn a reasonable return by investing wisely. To beat the market will be an extra accolade.

Of all the investing disciplines, value investing should be the most intelligent way of achieving your investment objective. What could be more sensible than purchasing a dollar at a discount? However, its followers are in the minority, in spite of Buffett’s triumphs. Why is that so? The answer lies in human psychology. Emotional feelings like greed and fear, herd instinct and anchoring effect, etc. makes people irrational and thus invest badly.

Honestly speaking, I also suffer from these psychological factors. In order to avoid acting irrationally, constant reminder of not falling into these emotional traps are a must.(Easier said than done!) One way to rein in your emotional instincts is to read books on value investing (Buffet’s letters are the best).

Being a Singaporean investor, it is wise to grab the home advantage. Presently, I own five businesses (investing is most intelligent when it is business like), Sinomem Technology, SP Chemicals, CM Pacific, SPH and Sincere Watches. I will elaborate on these and other businesses in my future commentaries.

To run a marathon, stamina, discipline, patience and endurance are the keys to success. Similarly, no amount of sound investment analysis can compensate for a lack of these investment attributes. Watch your step, an investment marathoner know each misstep may lead to an investment failure in the long run.

Entry filed under: Investing. Tags: .

My investment mistakes

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