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What Do You Read in the Morning?- Motley Fool


motleyfool website imageHow I Timed the Market” by Tim Hanson writing for Motley Fool is an example of the type of articles you can read at Motley Fool by subscribing to their email services. I have a summary of different articles it sent to my email which I make it a point to read every morning.

The writers there give you the low down about companies they look at and provide insights into the investment mindset. At times, the articles there may give you clues to which are the companies worth looking further into and what are some clown companies you would do well to avoid. They focus very much on US stocks with limited foreign stock coverage.

Best of all, its free. Unless you subscribe to their paid newsletter.

In the article which I read by Tim Hanson, the writer talks about selling right near at the bottom of the market in February 2009, while buying into the dip in July 2008 just before the whole financial market crashed through the months of August and September. He also talks about being unable to buy into the market because his excess funds for investment were all used up from August 2008 through 2009.

I experienced some of the self doubts and questions in the depths of the market too, wondering if I should sell off and cut my losses. In the end, I decided not to and in fact bought some more in March, April and May of 2009.

Not that I am a better investor. Far from it. I just happened to be reading good articles in the months of maximum pessimism in dreary March 2009 and I remember posting this blog article “Fear in the Market- Time to Wake up Greed” on 22 of March 2009 while reflecting about the different articles I have read.

To be honest, I was thinking quite a bit about paper losses in the shares portfolio of up to almost 60%. At the same time, my significant other was made redundant from her job as her company closed down operations in Singapore. So it was a bit of a trying time.

The things that sustained me was knowing that market dips are opportunities for young (relatively, anyway) investors to buy and accumulate shares in good companies; shares goes both up and down; I have a relatively long time before retirement; P/E ratios and market valuations were dirt cheap at the time; I still have a job and our living costs were manageable.

I didn’t even contemplate stopping the dollar averaging investment plans as again, it was the best time to buy more units of the funds.

At the end, it all comes down to what is the amount of time and preparation you are willing to take on to learn, relearn and refine what you have learnt about investment. It really is a never ending learning about investment.

Currently reading “Fooled by Randomness” by Nassim Nicholas Taleb- A better and less dry book than the Millionaire Next Door so far.

So what are your reading preferences?

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Musicwhiz said...
September 30, 2009 at 10:33 AM  

Hi Lemizeraq,

Life can be trying at times and I've been through some personal struggles as well in the last 5 years, so I can empathize. It's never easy to know when to invest but we should develop a system with which we are personally comfortable with. I was lucky in a sense in that I had developed my system of value investing by early 2008, so I managed to buy during the lows in Oct 2008 and March 2009. Whether I can survive future market cycles is another matter altogether. The key is to be humble and always learn, learn and learn (from mistakes as well).

As for books, I've read Richest Man In Babylon by Clayson, as well as Lynch's books. I also re-read some of my value investment books including The Intelligent Investor by Benjamin Graham.


Lemizeraq said...
September 30, 2009 at 11:38 PM  

Hi Musicwhiz,
Thank you for your comments.

I am still learning from all the investment books out there. The Intelligent Investor by Benjamin Graham is a book that I have read. Flipped through Peter Lynch books, but haven't bought one nor borrowed one yet :)

Your article on behavioral finance is pretty interesting. Think that is a field that is good to look at when learning about the psychology of investors and their mindset.

It could help out when you know an investor's is going to be making a decision on an emotional basis.


Musicwhiz said...
September 30, 2009 at 11:46 PM  

Hehe yep ! In fact, most of the time investors/traders are emotional, thus the stock market itself is an emotional creature. But over time, the fundamental pillars of economic success will permeate through and cause the share prices of good companies to appreciate. This is why I believe one must have prudence, patience and perserverence in order to succeed. I am still a new bird on my investing journey, so hope to learn from others such as yourself too.

Behavioural Finance is considered a relatively new field. For more information on it, I suggest a book by Jason Zweig called "Your Money and Your Brain". Interesting stuff.


Lemizeraq said...
October 1, 2009 at 11:00 PM  

Hi again Musicwhiz,

I am reading Fooled by Randomness by
Nassim Nicholas Taleb and it is superb :) It adds a very much needed perspective to investing.

I'd check out the book by Jason Zweig, I enjoy his column with WSJ. Thanks!


Wealth Journey said...
October 2, 2009 at 2:30 PM  

I believe knowledge is redundant without the conviction to act.

Your accumulation of stocks from march to may is conviction to act as not many dare to enter the market.

It's not because you were lucky reading some articles. It's coz you got knowledge combined with conviction to act.

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