In the investment world, there is this dichotomy between value investing and momentum investing.

Today, I try to convince you that value investing is not for you, that you are more likely to die than thrive in momentum investing. I try to convince you there is a third way .....I call it Dynamic Investing. I can also call it KYY investing . Its the way forward in the investing jungle. He made it but how? KYY is a practitioner of Dynamic Investing invented by KYY. I am the St Paul, the Mengtze spreading the message that can save the world .........the retail investor world.

This is my 8th instalment of this series I call it, " So, you also want to become value investor? " An indepth look at value investing and its pitfalls. 

Value investing is not for you .

In my  first instalment, I concluded :

"Sorry to disappoint you but there is no such thing as an intrinsic value in a vacuum. It all depends, its always relative and is always a moving target. This alone should undermine your confidence in so called intrinsic values and under (over) valuations. 

Value investing? Its just a fancy title invented by salesmen. "

Go read it....It also introduces you to the subject value investing so I don't have to repeat it here.

In my second instalment , I emphasised the importance of "Know Thyself" and which box you tick.

The third instalment reminds you.....

The end result is determined by how many shares a super investor buys when he is right., and his ability to ride the trend when he is right.

The fourth instalment distinguishes between prevention focused people and promotion focused people.. It concludes by saying.:

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.

The fifth instalment teaches you how to really look at forex gains and losses, not the way typical analysts looks at it. Its also called the greater fool theory.

and this section is important. Just as the analysts community did not anticipate the huge drop in core earnings earlier this year, the analysts and even market prices have not anticipated the huge jump in core earnings to come in some shares this Dec quarter.

The sixth instalment tells you the danger of focusing too much on NTA and cash at bank on making an investment decision with a case study. The conclusion from that :

In the seventh instalment, I declared value investing dead 

Value investing is dead...died long time ago. 

In this instalment, ( and subsequent instalments) I tell you about dynamic investing. About really really how to make money. Rich as KYY.

Before that, I really really want to convince you ......Value investing is not for you.

By value investing, almost by definition, you are going to buy a low volume small cap,  cash rich  , NTA rich stock forgotten by the market .   More often than not , trading side ways, going nowhere or even down trending stocks....this most often is a rich hunting ground for value investing. By value, people are attracted to cash and NTA and discounts to NTA for this is the easiest to understand. But this is wrong, wrong and wrong for retail investors.

Such stocks will go nowahere until one of these things happen..........

- There is a General Offer, a Takeover, a management buy out

- a change of managemnt

- a game changing event that changes the fortunes of the company. 

You see.....institutions buy hundreds of shares. So many different shares, every year, some on their list will meet these conditions and all their waiting time is rewarded. They can just buy and forget about it. Can you as a retailer? Your list is preferably about 10 stocks only. Your chances of striking jack pot in this manner is not high. Its a numbers game. It is not suitable for you even if certain institutional investors can tolerate it. Their objectives is diversification and low risk. Your objective is to be rich and make a difference.

Don't buy shares just because of NTA or cash in bank. It seldom pays. 

A good buy is a good business, good people and good valuation, in that order. One out of three don't make it a good buy and if it is not good enough to buy, it is not good enough to hold. Remember, a professional takes action. An amateur becomes a frozen soldier.

to be continued...................