Dec 27, 2012

Investing

So, I've recently begun investing my money, which up until now has either lain dormant in a bank account or in some fund from long ago. I think I've learned a lot in this short time, by making many mistakes of course. Some mistakes/things I learned/thoughts:

  - It's a mistake to listen to other people and their stock picks; especially people that says a stock will rise an awful lot in a short time. Or rather, this is dangerous when I can't asses the business and judge whether this is reasonable or not. Why do you make this mistake? Greed makes you think like an addict.. Fortunately I managed to get out of the way and sell (with a small profit aswell, woho luck) my stocks picked in this way.
 - Learned a lot about value investing a lá Graham and Buffet. This will be my style of investment going forward.
 - I bought stock that I didn't really believe in in the long run, but which I think might be undervalued at this time. Is this wrong? Personally I don't like it. My money should buy a part of a business that I believe in.
 - Learned that investing and the greed that is associated with it can hijack your brain and cause many irrational, and costly, decisions.
 - Learned that courtage will eat your  monies if you trade a lot.
 - Learned that many so called analysts suck big time.
 - Learned that there is a lot of irrationality in the stock market. Stocks can be very overvalued or undervalued. Undervalued stocks is a road to riches.
  - Take it easy, don't chase after opportunity. If you do you'll likely make mistakes, plus it's quite fatiguing.
 - I know that I have a lot of technical stuff to learn (how to read reports and evaluate the company based on them).
 - I learned that it'll be very hard to follow these learnings - my primate brain tells me to do otherwise.
 - Try to stick with companies that you understand.

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