Stockman blogs

so you also want to become value investor? (4)

stockmanmy
Publish date: Sat, 14 May 2016, 01:16 AM
Trade at your own risk. I am here only to vomit out my feelings

 

 

let's suppose you can buy only one counter for the rest of the  year,  can you find one?

if you can, it means you have potential to be super investor

does not mean you will be one if the market is against you or fate is not with you

but to be truly focused, fortunes can change fast.

 

do you have what it takes to be a super investor? to put all your eggs in one basket , to be like  true entrepreneurs? 

Most people are prevention focused ( as opposed to promotion focused ). For the definitions refer to this wonderful article 

 

https://hbr.org/2013/07/hidden-danger-of-being-risk-averse/

 

The hidden danger of risk aversion. 

Risk aversion is good. Risk aversion is what keeps us alive. Through evolution, we are conditioned to be risk averse. When faced with danger, we immediately have the flight or fight response, adrenalin starts pumping, heart beating.

“For most people, the fear of losing $100 is more intense than the hope of gaining $150

Most people are prevention focused. Consciously or unconsciously, they will do whatever they can to maintain the status quo. when faced with losses.

For most people,  to prevent losing $ 100 is more urgent than the hope of making $ 150 even if both events have equal

chances.

But some, not many are the promotion focused people. They see their goals as opportunities to make progress and end up better off, and are not particularly averse to risky choices when they hold the potential for rich gains.

Evolution has equiped most people to be prevention focused. It is good for the species most of the time.  But there are hidden dangers to risk averse as well. When things are going smoothly, the prevention focused guys will avoid risk ....the hidden danger comes when things are not going smoothly. 

For it is when things are not going smoothly, the normally conservative prevention focused people can become most reckless in their attempts to revert to status quo.

As examples, read about the “excessive exuberance” of Wall Street and the story of the London whale in the following article.

It is important to read the following in order to learn about the dangers and pitfalls of risk aversion.

https://hbr.org/2013/07/hidden-danger-of-being-risk-averse/

 

Its important to spend some time learning about psychology and learning about one self.

Just as important as learning the tools of value investing.

Quite obvioously, to be a super investor, one has to train oneself to be a promotion focused investor

 

 

What you want  to do as super investor is to approach the market with clear frames of mind based on facts and take calculated risks  and see the goals as opportunities to make progress and end up better off, and are not particularly averse to risky choices when they hold the potential for rich gains., in other words be an entrepreneur.

 

Do you have what it takes to be a super investor?

Do you want to be a budding super investor?

 

 

 

 

 

 

Discussions
2 people like this. Showing 3 of 3 comments

Icon8888

My experiences tell me that the concept is likely true and valid, but it might not be a magic bullet that solves all problems

Investing is a vast topic. This could be just an ear or a leg in the story "the blind men and the elephant".

There are many other methods that work. For example : buy and dumb dumb hold. All are useful, depends on circumstances

Anyway, well done

Look forward to Part 5, if there is one

2016-05-14 07:02

stockmanmy

if it is so easy to make money, it would be called a bubble, wouldn't it?

nevertheless, knowledge is still knowledge.
facts are still facts.

2016-05-14 15:47

stockmanmy

personally, I think the rest of the year is a year for defensive portfolios, not extreme risk taking.


a defensive diversified portfolio....


CBIP
Ekovest
Ecoworld
Taan / Jtiasa
Bornoil



But still, always good to be armed with prevention focus vs promotion focus.

2016-05-15 10:49

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