Investing – from Buffett to Pooh Bear
Investing from Buffet to Pooh is an exclusive extract from Robert Cole’s new book where he writes about his top unwritten laws for successful investing. But, what are the laws for successful investing? I made a summary of them;
There are ten laws for successful investing. The first rule is: never forget rule number 1. According to Warren Buffet, a stock-market guru, you shouldn’t lose money.
Rule number 2 describes the link between money and people. If you want to make money, you will have to invest in people. It’s a sort of psychological view because companies are seen as collections of people. So you need to be able to relay on trustful people to indentify good investments.
The third rule is the logical rule of three. If there is a reason why you shouldn’t invest in a company and you have at least 2 good reasons why the company is invest worthy, then you need to take action.
Hayek’s law is the fourth rule, the law describes the suggestion to keep the company’s directors when you’ll invest in a company. This explains the opportunity for the investors to reach a corporate governance.
There is also an important fifth rule. Investing and gambling means not the same. There is a difference. Gambling gives money to some, but creates a lot of decreasing values as well. But thanks to investments, profits increase, so all can win.
Sentiments rules are explained in the sixth rule. If you want to become a good investor, you might not act rationally but irrationally. As investor, you need to have the importance of behavioural psychology.
The seventh rule makes the difference clear between price and value of the investment possibility. You need to know the value of everything.
The eighth rule refers to Winnie the Pooh. Once, the yellow bear got easily claimed in a tight spot to eat some honey. But before his action, he didn’t think about how he could get out of it. So before you invest, look if there is a way out.
For the ninth rule, you’ll have to take account that tax breaks aren’t useful if the investment isn’t profitable.
Last but not least, the tenth rule who says: An investment portfolio is like a garden. Like a garden changes during the season, investments do to, so it is wise to see how investments change before you act.
According to my opinion, I don’t agree with all Robert Cole’s top unwritten laws for successful investment. The first law explains that you shouldn’t lose money because you can use a strategy for not losing money but to be sure about it, an investment is always a risk.
Trustful people are people on who you can relay on. But when do you know if people are trustful? I am convinced that these days nobody can be trusted. I can advice everyone that taking their time to know someone better is a more efficient law. But it has the disadvantage that it takes a lot of time, and time means money. What’s important when doing business.
If I read the third rule then I thought by myself: “Is this rule logical?” Yes, is the answer. I use this rule when I play poker.
The fourth rule is only useful when you do an nvestment on a large scale.
The fifth rule is not useful, because, how can someone know the difference between gambling and investing if investing is gambling because you can always have a bad result.
The sixth rule explains the need of behavioural psychology. I am sure that if you can use this rule as potential investor, you are an excellent investor.
The seventh and the eight rule are the most important rules. If you know what the product is worth you will not overpay for a share. Everything has it’s own price, you have to buy low and if the product is over it's price it is a bad move to invest at that time.
For the eight rule, a way out is always necessary. If there is no way out, an investment can’t be worthy.
The ninth rule only depends of the future, so you can’t predict this.
The tenth rule is a today’s rule, investment must be placed in time. There are times when investments go better or even less better.
I can conclude that investments are always a risk and need a personal and efficiently strategy that can’t be described because it differs from the sort of investment you make.
Source: http://www.timesonline.co.uk/tol/money/article7033838.ece
Investing from Buffet to Pooh is an exclusive extract from Robert Cole’s new book where he writes about his top unwritten laws for successful investing. But, what are the laws for successful investing? I made a summary of them;
There are ten laws for successful investing. The first rule is: never forget rule number 1. According to Warren Buffet, a stock-market guru, you shouldn’t lose money.
Rule number 2 describes the link between money and people. If you want to make money, you will have to invest in people. It’s a sort of psychological view because companies are seen as collections of people. So you need to be able to relay on trustful people to indentify good investments.
The third rule is the logical rule of three. If there is a reason why you shouldn’t invest in a company and you have at least 2 good reasons why the company is invest worthy, then you need to take action.
Hayek’s law is the fourth rule, the law describes the suggestion to keep the company’s directors when you’ll invest in a company. This explains the opportunity for the investors to reach a corporate governance.
There is also an important fifth rule. Investing and gambling means not the same. There is a difference. Gambling gives money to some, but creates a lot of decreasing values as well. But thanks to investments, profits increase, so all can win.
Sentiments rules are explained in the sixth rule. If you want to become a good investor, you might not act rationally but irrationally. As investor, you need to have the importance of behavioural psychology.
The seventh rule makes the difference clear between price and value of the investment possibility. You need to know the value of everything.
The eighth rule refers to Winnie the Pooh. Once, the yellow bear got easily claimed in a tight spot to eat some honey. But before his action, he didn’t think about how he could get out of it. So before you invest, look if there is a way out.
For the ninth rule, you’ll have to take account that tax breaks aren’t useful if the investment isn’t profitable.
Last but not least, the tenth rule who says: An investment portfolio is like a garden. Like a garden changes during the season, investments do to, so it is wise to see how investments change before you act.
According to my opinion, I don’t agree with all Robert Cole’s top unwritten laws for successful investment. The first law explains that you shouldn’t lose money because you can use a strategy for not losing money but to be sure about it, an investment is always a risk.
Trustful people are people on who you can relay on. But when do you know if people are trustful? I am convinced that these days nobody can be trusted. I can advice everyone that taking their time to know someone better is a more efficient law. But it has the disadvantage that it takes a lot of time, and time means money. What’s important when doing business.
If I read the third rule then I thought by myself: “Is this rule logical?” Yes, is the answer. I use this rule when I play poker.
The fourth rule is only useful when you do an nvestment on a large scale.
The fifth rule is not useful, because, how can someone know the difference between gambling and investing if investing is gambling because you can always have a bad result.
The sixth rule explains the need of behavioural psychology. I am sure that if you can use this rule as potential investor, you are an excellent investor.
The seventh and the eight rule are the most important rules. If you know what the product is worth you will not overpay for a share. Everything has it’s own price, you have to buy low and if the product is over it's price it is a bad move to invest at that time.
For the eight rule, a way out is always necessary. If there is no way out, an investment can’t be worthy.
The ninth rule only depends of the future, so you can’t predict this.
The tenth rule is a today’s rule, investment must be placed in time. There are times when investments go better or even less better.
I can conclude that investments are always a risk and need a personal and efficiently strategy that can’t be described because it differs from the sort of investment you make.
Source: http://www.timesonline.co.uk/tol/money/article7033838.ece
I think that dieter has made the right remarks. Investing in companies without losing money is an illusion. There have been companies who were a good investing but after making a mistake they turn in a short time into a bad investment. Trust is a keyword in investing but like dieter says you should take time to get know someone better. I think when you know somebody very well you can have trust in you investment.
BeantwoordenVerwijderenAccording to the third rule I think that you always must consider if the negative raison the positive exceeded. All they other rules are very useful although I think on the eight rule you must prevent this when you are working according to the first rule. When there is now way out you can’t prevent losing money.
When you are an investor I think that you always work by these 10 rules. You don’t use them exactly but you keep them always in your mind. Investing is a risky business but when you did enough research I’m sure that you can reduce the risk to the minimum.