1. Everything the Richest People Say About Money
This is probably a topic that many people, including me, are curious about. That is, ‘The characteristics of people who lose money in stocks and the characteristics of people who make money. ‘ I have extracted some contents worth noting from the book.
2. It seems that there are more people who lose money than those who make money in stocks. It is a common feature in all asset markets that there are more losers than winners. That is why there are few rich people and many poor people.
Capitalists do not make all the profits. Many of them will suffer losses, and only some will make a lot of profits. The characteristics of those who suffer losses are as follows.
- I just followed along.
- I don’t have a plan for what to buy.
- The power of money is weak.
When people say that the stock market is a once-in-a-century opportunity, they gather all the money they have and rush to buy it. Just a month ago, they fearlessly invested a large sum of money in stocks that they had never thought of. Even so, they have no plan or study. When the price goes up even a little, these people are happy, saying that they have earned a year’s worth of bank interest. When the price goes up even more, they wait and reluctantly follow, but when it goes down even a little, they are scared and lose money. Their original intention is to buy if it falls below the selling price, but when it actually falls, they cannot buy it.
These people see their money melting away like ice cream in their bank accounts. Moreover, they have money that they do not have time to spare mixed in with the money they have saved. They trade stocks with borrowed money and even use leverage two or three times to buy products. They are working with a blackmailer with a knife behind their neck. If this kind of money is mixed in, even good money will be damaged.
People who deal with the stock market like this will never make money in stocks. Even if you happen to make money, that money will eventually flow back into stocks and disappear along with the principal.
3. People who are successful in stock investment have three major characteristics.
- Think of yourself as a manager.
- The money you have is good money.
- Wait until it is cheap.
The money of successful people is solid and heavy like a rock. This money has no intention of going anywhere right away and is comfortable even if it stays there for a long time. Rather, it is money that is gathered to the point where it would settle down for life if it were given a meal called dividends. Naturally, it has strong solidarity and does not succumb to territoriality or threats. The money also acts as the owner of the place it sits. It knows how to wait leisurely until it makes a profit.
Judging from the above, are ‘I’ and ‘you’ who are reading this article the ones who are losing or the ones who are gaining?
In my case, to get to the conclusion, I would say that it is ‘neither this nor that’. In a way, I have a bit of both. I did not just follow along, but (other than the general criteria of investing in blue chip stocks) I do not have a plan for what to buy, so it is somewhat impulsive. However, the money I have (although very small in size) is good quality money. However, I have not yet reached the stage of thinking of myself as a manager, and I have not yet been able to sufficiently evaluate the value of the company and wait until I buy it at a reasonable price. Should I say that I also rely on intuition and charts? As a result, I do not lose much because I do not need to buy blue chip stocks and sell them in a hurry, but there are many cases where I buy when I feel that this or that is falling without a plan and get bitten(?). Since I do not need the money urgently, it is better that I can wait.
It seems a little clearer where I need to improve. When purchasing stocks, I will have a little more of a manager’s mindset (I will purchase stocks of companies that I want to be a shareholder of, and evaluate the company with the same mindset and attitude as a shareholder), and I will set my own standards for the appropriate purchase price, evaluate it, and purchase it systematically.
When I think about it, I think it is a time for reflection and development. I hope that those who read this article will also improve their shortcomings and become people who take advantage. (Of course, this does not mean that this is the right answer, because there is no right answer or royal road to stocks. Just refer to it, and if there is a method that you think is right, you can follow that method.)
Read more about how to be successful in Investing world.
https://insight-room.com/investors-should-be-philosophers-not-technicians/