1.Don’t be too believe the advertisement on the stock market.
The first reason is simply due to “cheating”. Let’s be
honest about many advertisement. Many of them do not tell the whole
and true story of their performance. For example, they would
tout huge percentage of gains for certain winning stocks and
hide the losing stocks. If you look deeper into their whole
portfolio performance, their portfolio performance was not
impressive at all. Many investment newsletters will have
multiple portfolios in publication. In their ads, they will
only mention the performance of the winning portfolio and
hide the losing portfolio. The problem with multiple
portfolios is that when you subscribe to their newsletters,
you would not easily know which portfolio out of many will
have best performance in the long run. Which portfolio do
you follow? Most important of all, which portfolio out of
many does the newsletter author invests for his/her own
money? If the newsletter author or the mutual fund manager
does not invest into a portfolio himself or herself, how
would you trust their services?
2.three little pigs went to the market to stock
up for the future. The story of the three little pigs, you can refer to it.
Say very good. We should be like in the story of the third little pig, what they invested in. To regular analysis and review, and see if it is correct.Mr. Third Pig’s purchases all were good because
every month he had checked to be sure nothing
was going bad and if it was he would get rid of
it right away. He was able to enjoy being at
home or playing golf because his pantry was
It seems it doesn’t make any difference where
our 3 pigs did their shopping – DOW or NASDAQ
markets. The important difference was that the
one who checked to be sure his purchases never
went bad was the one who ended up with plenty.
3.You need to start early in value investing
Let’s be honest about value investing, it is not a get-rich-
quick scam and it takes time to really make living with
value investing without need of your regular job. You need
large starting principle if you want to make living from
stock market investment than your salary.
By reading Warren Buffet’s article above, you can pretty
much guess that successful value investors can achieve 20%
to 30% per year performance consistently over the long run
regardless of whether market is bear or bull although it is
possible to obtain significantly higher performance in
earlier investment years due to smaller fund size and luck.
20% or 30% more consistent investment return is already very
high return over the long run. Since Peter Lynch retired
from Fidelity, you can rarely find a mutual fund with that
kind of performance over past many years.