Do investment homework and do it yourself
I have mentioned many times in my book “The Rules of Super Growth Stocks Investing” that investors must do their homework. That is to say, you must devote at least more than a fixed amount of time to stock investment every day, and the key point is to do your own homework. I also specifically pointed out that everyone is accustomed to watching TV financial programs as their daily homework for investing in stocks, but this is not considered homework. This view of mine has aroused the interest of many readers, and they have left a message hoping that I can elaborate on it.
People who believe get rich overnight can’t succeed
Except for gambling, winning the lottery, or the inheritance of property that suddenly falls from the sky, there is no daydream of getting rich overnight. The bigger myth of retail investors (not only investment novices, or young people) after socialization is: people who generally believe that investing in stocks can make a lot of money usually rely on inside information, and they start from the very beginning of life and have unequal wealth. Subscriptions to the well-known investment advisors, and bet only on single popular stocks hope to reverse their lives in the short term.
Successful investors know that these are incorrect investment concepts, and if investors hold such concepts from the bottom of their hearts, you will never invest succeed, and you may also ruin your fortune. These myths all have a common feature-the belief that the stock market can get rich in a short period of time, and they are unwilling to invest time and effort.
I must say that these are all misunderstandings of the fundamental concept of investment. What is not worth doing, no matter how good it is, it is in vain! Like Buffett said: “That which is not worth doing at all is not worth doing well.” But what is strange is that no one has ever suspected that going to work to make money requires investment of time and effort to increase the number of their bank accounts. Investment is not different from work, and there will be no gain without investment.
Don’t spend time on these things
The question is, what kind of homework do investors need to do if they want to succeed? I want to put it another way, the following are not doing investment homework, and you should try to avoid spending your precious time on them:
- TV financial programs: The existence of TV financial programs is based on advertisements sponsored by the audience ratings. TV celebrities and Internet celebrities make a living depends on the ratings or the number of Internet clicks. In order to attract audiences, they must think of ways to make audience surprising, so as to win the audience’s attention. Their specialty is acting, not investment. Watching these financial programs every day will not help your investment performance in any way except wasting your precious time and bringing you different entertainment effects. More importantly, if you watch this type of financial program for a long time, you will unknowingly be instilled with wrong ideas. This is where your greatest lethality lies.
- Analyst’s report: No matter how famous the analyst is. Regardless of the accuracy of the forecast (usually the answer is no), the research report is the analyst’s experience report. He has spent his time on it, and the logic, thinking, and motivation behind it (the analyst’s report will definitely be released with specific motivation). We have no way of knowing, but this part is the most important. Most people see only the final conclusion, usually long or short or forecast price. However, any form of forecast is untenable in the stock market. Because we just don’t know about the future.
- Chase touted stocks: Most people think that they can save a lot of work on their own research and homework. But in addition to having to spend money on this kind of thing, it will make you lose your hard-earned money, and it is more likely to make you bankrupt. Because you don’t know anything about touted stocks, you will only end up as a lamb to be slaughtered. Suggest you read my post “Investors who chase for touted stocks.”
Three Steps to Successful Investing
Back to the original sentence: “Investors must do the necessary homework every day, and the homework must be done by themselves.” But why? Because the trilogy of any successful investment must be:
- Collect relevant information and facts as much as possible.
- Make inferences based on the facts.
- Finally make a decision on whether to invest.
These three parts are the homework investors have to do. If we omit any of these steps, or take the work of others (such as analyst reports) to replace it, we are not doing our homework. Because only if you put yourself into these three steps completely, you can fully understand the ins and outs, and what you get is your own. More importantly, the investment made based on this will have confidence and reduce the risk of investment.
In this entire process, three steps are indispensable. Only in this way can you form your own investment theory and logic. This is the foundation for increasing the probability of investment success. Based on the things obtained in this way, others can’t help at all; the things obtained are tenable, and others can’t take them away. Unless human science and technology are really advanced someday to make the great shift in martial arts novels come true, there is a way to copy the things in another person’s brain to another person’s brain one by one. Remember: Thinking cannot be outsourced!
There are no shortcuts in the world
Let me give you an example, and you will understand what I mean: When you were in the first grade of elementary school, if you thought the homework given by the teacher was too annoying and took too much time, and you had a temper and didn’t want to practice, then you might even can’t write your name. Some people will say that it seems that the effort and effort required is too great, yes, it must be so if you want to succeed, there is no shortcut.
Why do you want to do this?
The necessary condition for successful investment is to form your own investment style and way of thinking, and you can form your own investment style and way of thinking by doing your own investment homework. It is difficult to succeed if you cannot form your own investment style and way of thinking.
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