ARE YOU READY FOR THE RAINY DAY?
Author: contemplator | Publish date: Thu, 7 May 2015, 04:12 PM
This blog is dedicated for VALUE INVESTORS ONLY
HISTORY IS ALWAYS GONNA REPEAT ITSELF
Stock markets will always crash on certain day. We won't know when and we won't know how. Don't buy of story of somone can predict when the market will crash. Stock market is unpredictable. Reading articles about when market crash, how is the macroeconomics going to be is simply a waste of time. Future is unpredictable.
So..... What is the thing that you know and should do? Market will crash but we won't know when and we won't know how (just like i repeat this sentence before). You need to:
1. Review your capital allocation. Have you prepared for a crash that will happens tomorrow? Is your cash reserve enough? Do you have appropriate temperament control whereby some of your holdings will have their face value halved?
2. Unwanted risk minimization. Can you sleep like a baby during major market crash?
3. Are you prepared to buy the bargained deal? Any good value stock on watchlist? Do you have the guts to buy them? (the guts can be specified as calculated about the business, your notion about that particular stock)
There will always be times that the day will rain, don't prepare at last minutes.
Using some Warren Buffett's wisdom here:
Next up is cash. At a healthy business, cash is sometimes thought of as something to be minimized – as an unproductive asset that acts as a drag on such markers as return on equity. Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.-- BH Annual Report 2014.
WB: volatility is inherent characteristic of stock-- nothing to do with its value.
Just sharing my thought here.
Prudent investor should revisit chapter 8 and 20 of The Intellegent Investor, I found them highly useful and enjoyable (many times)
In contrast, Ben’s ideas were explained logically in elegant, easy-to-understand prose (without Greek
letters or complicated formulas). For me, the key points were laid out in what later editions labeled Chapters 8 and 20. (The original 1949 edition numbered its chapters differently.) These points guide my investing decisions today.-- BH Annual Report 2013.
INVESTMENT IS MOST SUCCESSFUL WHEN IT IS MOST BUSINESS LIKE-- Benjamin Graham
Contemplator 7 May 2015
HISTORY IS ALWAYS GONNA REPEAT ITSELF
Stock markets will always crash on certain day. We won't know when and we won't know how. Don't buy of story of somone can predict when the market will crash. Stock market is unpredictable. Reading articles about when market crash, how is the macroeconomics going to be is simply a waste of time. Future is unpredictable.
So..... What is the thing that you know and should do? Market will crash but we won't know when and we won't know how (just like i repeat this sentence before). You need to:
1. Review your capital allocation. Have you prepared for a crash that will happens tomorrow? Is your cash reserve enough? Do you have appropriate temperament control whereby some of your holdings will have their face value halved?
2. Unwanted risk minimization. Can you sleep like a baby during major market crash?
3. Are you prepared to buy the bargained deal? Any good value stock on watchlist? Do you have the guts to buy them? (the guts can be specified as calculated about the business, your notion about that particular stock)
There will always be times that the day will rain, don't prepare at last minutes.
Using some Warren Buffett's wisdom here:
Next up is cash. At a healthy business, cash is sometimes thought of as something to be minimized – as an unproductive asset that acts as a drag on such markers as return on equity. Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.-- BH Annual Report 2014.
WB: volatility is inherent characteristic of stock-- nothing to do with its value.
Just sharing my thought here.
Prudent investor should revisit chapter 8 and 20 of The Intellegent Investor, I found them highly useful and enjoyable (many times)
In contrast, Ben’s ideas were explained logically in elegant, easy-to-understand prose (without Greek
letters or complicated formulas). For me, the key points were laid out in what later editions labeled Chapters 8 and 20. (The original 1949 edition numbered its chapters differently.) These points guide my investing decisions today.-- BH Annual Report 2013.
INVESTMENT IS MOST SUCCESSFUL WHEN IT IS MOST BUSINESS LIKE-- Benjamin Graham
Contemplator 7 May 2015
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