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Many people ask for simplifications - explanations that their 6-year old child or mother can understand. Surely there must be just a single sentence that can explain, how to be rich? Maxims such as, a bird in hand is worth two in a bush, or It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price, come to the mind of this investor. There is No Holy Grail Unfortunately, getting rich is simple, but not easy. It is simple and not rocke

Imagine an old man who’s spent his entire life up in a small town. He’s the Lifer. No detail of the goings-on in the town has escaped his notice over the years. He knows the lineage, behavior, attitudes, jobs, income, and social status of every person in town. Bit by bit, he built that knowledge up over a long period of observation and participation in town affairs. The Lifer knows where the bodies are buried and who buried them. He knows who owes money to whom, who gets alon

The average trader or investor believes that money is made by watching the stock market charts. He or she believes that there is a magic formula, through which the floor and ceiling or momentum of the stock market can be predicted with a very high probability if not certainty. Yet this method of trading has been criticised for its inconsistent and volatile results over the years. Per Share Value In contrast, one of this blogger's prescribed way of profitting in the stock ma

The preconception of investors is that they must be particularly intelligent to do what they do. They must know-it-all, and must be able to tell people about a phletora of different subject-matters, at the tip of their finger tips. Peter Lynch, in his book, One Up on Wall Street, may beg to differ. How to Use What You Already Know to Make Money in the Market Peter Lynch instead, goes sofar as to use the language, "dumb money". He argues that the average investor can profit

"And what is good, Phaedrus, And what is not good - Need we ask anyone to tell us these things?" Robert M Pirsig, in Zen and the Art of Motorcycle Maintenance - an Inquiry into Values Is the above picture good, bad, or fair? Robert M Pirsig tells a story about his journey through America, in the 4-part book, Zen and the Art of Motorcycle Maintenance. It tells a story about himself, and his relationship with the motorcycle(s) he (and his son and 2 friends) use, as they cut ac

If you ride on the optimism of bulls in a bull market, any type of bottom line may make you happy. All you want, perhaps, is a comparison of the market price of a company versus the earnings per share. A low PE is good, a high PE is bad. Let The Chairman Worry About It Indeed, the board of directors is in place in any publicly listed company to ensure that the financial statements are properly prepared and that the auditors ensure that the numbers are true, accurate and not

If you're going to invest money in something you want to be entirely certain in what you're doing. You want to cross every t and dot every i. You want to know every number there is to know. Some even take pride in their track record. It gets to the point where they are superconfident and superintense in their business dealings. You cannot, ever, get anything wrong. Gambling? At the other end of the extreme, is a belief that business and investing is like gambling. There

For the longest time, this blogger thought that the interpretation of financial statements was a lost art. Living in the Malaysian state of Sarawak, in Borneo, nobody within reach seemed to be able to explain what the missing link to my understanding was! Was it something that would take an eternity to learn? Was a quantative type analysis of numbers significantly different from a qualitative type analysis? Indeed, there didn't seem to be a magic formula for the interpreta

"All I want to know is where I'm going to die, so I'll never go there." Charlie Munger If there were only one concept that Charlie Munger were known for (as if that were possible) it is perhaps his concept of inversion - solving problems backwards by identifying and avoiding what would cause failure. If you excuse the crudeness, his abovementioned quote is a major example of this concept of inversion. How do you live? It is not possible to identify and/or prescribe to anoth

Whilst much of life is about people and networking, how you handle people is as important as what you say to them, if not more important. Meeting acquaintances and persuading them to do something for you is different from asking the same of loved ones. How to Manage Business Colleagues? It would be easy to presume that, because one is dealing with or flushed with money, it would be easy to instruct or command a subordinate to do something. Yet, hierarchy is only one element

There is a misconception that you have to read voraciously and hungrily forever to get to the stage where you are able to be an investor. Who has the time? Who has the willingness to devote all their downtime to a second job? A Masters of Business Administration (MBA) for example, suggest that 2 whole years need to be dedicated to learning about business, before one is able to even start to do well in the same. This is notwithstanding that adults have to continue to feed the

"Relationships are another thing that compound, becoming stronger over time if we keep investing in win-win dynamics. Imagine a network of nodes that connect to each other at random. The likelihood of any given node receiving an additional connection is proportional to the number of connections it already has. Through randomness, a small number of nodes will end up receiving most of the connections—a phenomenon called preferential attachment. Preferential attachment is a type

We are encouraged to pay heed to what other people say. We are encouraged to be moudable, shapeable and to be adaptable to the winds. Let life tell us, teach us what is important in the world. Let life mould, shape and help us adapt. Nobody has all the answers, and there may well be shortcuts or answers provided by other people to our predicament, if we would just be open to the possibilities provided by other people. All Well and True This advice holds true, to some extent

Starting out, every aspiring investor may simply want to make money. That is perhaps why so many people end up trading (hour-by-hour or day-to-day), caring only about a capital gain or a bonus dividend return. A handful out of many will actually consider longer term investing, and even then the emphasis is on understanding how their capital can gain or lose without a short period of time? (After all, people have to eat, obtain a car, and pay for the mortage or rental to the

Everyday in the news we hear about the rise and rise of artificial intelligence - is a powerful computer or AI subscription all that we need nowadays to get rich? Historical Data Peter Bevelin had argued that as human beings, we would be wrong to rely exclusively on the reasonings and thinkings of a computer. In the infamous pre-2000 chess matchups between Gary Kasparov and the artificial intelligence, Deep Blue, it appeared that man may have had met its match in the game of

Glitz, glamour, trends and fads - if you're going to invest, you want to be the life of the party and the talk of the town with your selections. After all, growth goes onwards and upwards, if you choose the right business (technology). If you're going to do something, do it extraordinarily well? Do something hip, contemporary and something that is in the news all the time - something that you want to wake up for every single day. The popular belief is that the investing publi

There is a belief that you need to know the entire economic big picture system before succeeding in investing. People go into fancy thoughts about headwinds and tailwinds, and total addressable markets. Some say there is some truth on how that can affect a company's fundamentals. Others go so far as to say that nothing could be further from the truth. Such economics is not sales, revenue, or bottom line. Now, or in the future. If there is no economics big picture to under

It is true that investing has no hard and fast rules. There are no sure bets in investing, no clear answers, and no absolutes. The ability to invest comes from experience and a lot of wisdom and learnings. That is probably unhelpful - if there are no hard and fast rules to cling to, how can one get into the practice of investing, and do well in it? Atul Gawande If there are any pointers towards the right answer, however, the abovenamed author wrote a book on how to try to st

The superior man does not waste himself on what is distant, on what is absent. He stands in the here and now, in the real situation. - Confucius Often we tend to emphasize the destination so much that we miss the journey. Stay in the present and enjoy life today. Blaise Pascal wrote: Let each of us examine his thoughts; he will find them wholly concerned with the past or the future. We almost never think of the present, and if we do think of it, it is only to see what light i

There is a belief that you should respond to and take advantage of every twist and turn that the market gives you. Traders are thought to be rational and their decisions are thought to be in response to quality information provided by the management and board of directors to the investing public at large. The typical question against this belief is the question against what is commonly known as the efficient market hypothesis. In the said hypothesis, the belief is that every