5 Steps To Investing Better Than The Pros
Since we have now embarked upon a brand new year, if you aren't satisfied with the results of your investing efforts up to this point in time, perhaps a change in tactics is now what's needed!
Well to help you do just that, we've outlined five basic steps below, and if you follow them faithfully, you'll not only beat the "pros" at their own game, but you'll also become a great investor in the process!
WHY THE "PROS" DON'T THINK FOR THEMSELVES:
The fact that someone works for a big firm does not mean they actually know anything about making money. When you work for a large firm, like a Morgan Stanley for instance, the truth is you're not really expected to think for yourself about the big picture. You're simply a cog in the wheel. And so is everybody else in the organization. It works... all the cogs rely on each other.
For example, a Morgan Stanley broker's job is not to think about the markets... That's what guys like Barton Biggs and Byron Wien at Morgan Stanley are paid to do.
You're not expected to pick stocks...
That's the research department's job.
You're not expected to fill orders...
That's the trading department's job.
You're not expected to fill out account forms and send them to the home office...
That's the operations department's job.
And you don't have to keep up with the regulators...
That's the compliance department's job.
So what exactly does Mr. Broker do?
As a broker, your sole job is to be on the phone taking orders. That's it. "No thinking for yourself please... we have a department for that!"
So you as an investor can really beat those so-called "pros" - and you can do it by simply putting it all together by using these five steps. However, most people will not have the time or the patience or the desire to go through with this. But if you've got the time and you stick to these five steps, you can beat practically everyone!
THE FIVE KEYS TO BEATING EVERYONE AT INVESTING:
1) COMMITMENT. Succeeding at investing must become the primary thing consuming your brain. Among two roughly equally skilled competitors, the one with deeper commitment usually wins.
2) HOMEWORK. You need to know more than the other guy. This means educating yourself (reading) and crunching numbers yourself.
3) EXPERIENCE. Unless you're someone like Tiger Woods, even with all the skills and commitment, you're not going to win big your first year. But, you at least need to be in the game. Then keep paying your dues (by investing), take personal responsibility for your losses and try to learn from them, and the big profits will come.
4) THINKING FOR YOURSELF. It is a real "eye-opener" the day that you discover the fact that there are only a couple of persons in the "investing arena" who really think for themselves. These names include Warren Buffett, Bill Gross, and Jim Rogers... That's an amazingly short list. And don't ever forget the fact that employees of brokerage firms are not paid to think for themselves. So you'll be able to beat the brokerage firms in no time. But, if you're simply copying their advice, then you'll never beat them!
5) AVOIDING MAJOR MISTAKES. The "catastrophic loss" is what kills you as an investor. You can't afford to lose it all. Cut your losses early. Do whatever it takes to keep your downside limited and your upside unlimited. Then one day, that unlimited upside will show up in your account.
Finally, always remember that there are ways to do okay in 30 minutes a year. There are ways to do well in 30 minutes per week. But that's not what we have been talking about here. These Five Steps are intended to make anyone who follows them faithfully become a superstar - the best full-time investor possible!
* * * * *
Well to help you do just that, we've outlined five basic steps below, and if you follow them faithfully, you'll not only beat the "pros" at their own game, but you'll also become a great investor in the process!
WHY THE "PROS" DON'T THINK FOR THEMSELVES:
The fact that someone works for a big firm does not mean they actually know anything about making money. When you work for a large firm, like a Morgan Stanley for instance, the truth is you're not really expected to think for yourself about the big picture. You're simply a cog in the wheel. And so is everybody else in the organization. It works... all the cogs rely on each other.
For example, a Morgan Stanley broker's job is not to think about the markets... That's what guys like Barton Biggs and Byron Wien at Morgan Stanley are paid to do.
You're not expected to pick stocks...
That's the research department's job.
You're not expected to fill orders...
That's the trading department's job.
You're not expected to fill out account forms and send them to the home office...
That's the operations department's job.
And you don't have to keep up with the regulators...
That's the compliance department's job.
So what exactly does Mr. Broker do?
As a broker, your sole job is to be on the phone taking orders. That's it. "No thinking for yourself please... we have a department for that!"
So you as an investor can really beat those so-called "pros" - and you can do it by simply putting it all together by using these five steps. However, most people will not have the time or the patience or the desire to go through with this. But if you've got the time and you stick to these five steps, you can beat practically everyone!
THE FIVE KEYS TO BEATING EVERYONE AT INVESTING:
1) COMMITMENT. Succeeding at investing must become the primary thing consuming your brain. Among two roughly equally skilled competitors, the one with deeper commitment usually wins.
2) HOMEWORK. You need to know more than the other guy. This means educating yourself (reading) and crunching numbers yourself.
3) EXPERIENCE. Unless you're someone like Tiger Woods, even with all the skills and commitment, you're not going to win big your first year. But, you at least need to be in the game. Then keep paying your dues (by investing), take personal responsibility for your losses and try to learn from them, and the big profits will come.
4) THINKING FOR YOURSELF. It is a real "eye-opener" the day that you discover the fact that there are only a couple of persons in the "investing arena" who really think for themselves. These names include Warren Buffett, Bill Gross, and Jim Rogers... That's an amazingly short list. And don't ever forget the fact that employees of brokerage firms are not paid to think for themselves. So you'll be able to beat the brokerage firms in no time. But, if you're simply copying their advice, then you'll never beat them!
5) AVOIDING MAJOR MISTAKES. The "catastrophic loss" is what kills you as an investor. You can't afford to lose it all. Cut your losses early. Do whatever it takes to keep your downside limited and your upside unlimited. Then one day, that unlimited upside will show up in your account.
Finally, always remember that there are ways to do okay in 30 minutes a year. There are ways to do well in 30 minutes per week. But that's not what we have been talking about here. These Five Steps are intended to make anyone who follows them faithfully become a superstar - the best full-time investor possible!
* * * * *
posted by Bob Moser at
11:47 AM
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