Finally finished reading Buffettology. This book was published in 1999 and written by Mary Buffett and David Clark.

It shares the world’s most successful and famous investor Warren Buffett’s strategies for investing in the stock market. It has a very important concept called Value investing.

. . . → Read More: Buffettology]]>

Finally finished reading Buffettology. This book was published in 1999 and written by Mary Buffett and David Clark.

It shares the world’s most successful and famous investor Warren Buffett’s strategies for investing in the stock market. It has a very important concept called Value investing.

Personally, the first part of the book is very interesting. It highlights why Warren Buffett is successful in his investments while many others are not. It also tells you how he selects companies for investment and how his perception of buying stock differs from most people.

The second part of the book is more technical. It goes into details of how to value the company, at what price should you be buying, and how much to project your returns. I got a bit lost in this part of the book.

Nevertheless, I am glad I have completed the book as it gives me very good insights on what strategies I should use to invest. Of course, this is only the beginning. I shall continue to learn more from up-to-date investment books and formulate my own strategy before investing in the stock market.

Lastly, I learned something very valuable from this book. It tells me that the concept “High risk equals high returns” is not true.

However, I understand from many of my friends that the stock market is going up and now is the best time to go with the trend.

On hearing thisI begin to worry. Why?

I . . . → Read More: Investing]]>

Is the economy in a recovering stage? I am not an economics expert so I cannot comment on this.

However, I understand from many of my friends that the stock market is going up and now is the best time to go with the trend.

On hearing thisI begin to worry. Why?

I am not an investor. I currently do not invest in shares because I think it is a risky business. Nevertheless, I believe that the stock market has huge potential for gains. But it is meant for the prepared.

And this is why I worry for my friends. You see, I questioned their investment strategy and their answers are like ‘watch the news’, ‘check the charts’, ‘predict the future of the company’.

To me, these are techniques that are useful, but very risky. The reason is if you are investing in shares based on gutfeel or news a.k.a rumours, chances are the chance of success is as good as going to a casino. There are no fundamentals involved. Fundamentals like analyzing the company’s reports, knowing its intrinsic value and understanding its potential for growth, are crucial to buying a share.

To me, a share is not just a number that you see on the screen. It represents an interest in the business of the company and its future.

The stock market is going up now and it’s easy to make a killing. But what happens when the next market crash comes? I cannot bring myself to imagine how many will fall prey again to the cruel economy.

That is why I am not taking the ride now, for I am not prepared. But I am preparing, learning the fundamentals, and will apply when I have gained enough knowledge and confidence. And I will invest based on fundamentals and not on greed.

I believe that being prepared is the secret of success.

What about you? Do you have a strategy for investment that you would like to share? Has it been working for you? If you do, please leave a comment for us all to learn.