At the end of the day you want to be in investments that you know and understand. You want to have your money and time invested in an investment that you have a solid amount of knowledge about, a good deal of experience with, and by all means a plausible case of why your investing in it. The very best investments I have ever made have been due to the following three keys:
- Knew the subject / topic well.
- Knew where the industry was going.
- Knew where my investment was positioned.
If you're educated and versed in the topic, you'll know more about it than those who don't. If you're engaged in the issues at hand and know the reasons why something is happening, you'll be able to see what the next steps ought to be.
The idea here is to have a linear vision of the factors and influences of a non-linear environment. Being able to have a "line of sight" or to "cut through the fog" is what counts. And being on top of the game is going to give you that edge.
So how do you apply this to your investment strategies. One, What do you know well and why. Two, define your sources of knowledge and information, and ask if they're enough! Three, do you know how you can implement one and two into a feasible investment strategy that works in the current market place.
This strategy is evident when you hear big investors and smart money managers say they're "in cash" or "not active in the market place". What they're really saying is that they're learning about where to move next, what's going to make them move, and when is the right time. So yes, they are in cash because they're waiting for the right time to get in on something, and they will be certain to know more than just something about.
That's the hidden value!
Sincerely,
My Online Trader
1 comment:
Buffet always said that he doesn't invest in things he can't understand.
Good points.
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