Facts do help investment
Thomas Peterff, the founder of Interactive Brokers Group (ticker: IBKR), said: “I basically think there are no important secrets in how to invest, and there is not a lot you can learn from others. It’s all logical. The better you know the facts, and the more facts you know, the better you do as an investor. What I have learned through the industry is that the work that I need to do personally is irreplaceable. “
Do you invest in research or do your homework yourself? The criteria for judging are actually easy. You must read, check the information, and make independent thinking based on the facts.
Investment guru John Maynard Keynes said: “When the facts change, I change my mind. What do you do?
What is useful?
In my previous post “Information investors need should be important and knowable“: “Of course, there are no ‘facts’ regarding most future events, just ‘opinions’,” and so-called “Experts — especially people who are paid to be experts — often couch their statements as facts, but that doesn’t mean they’re sure to come true.” In short, it’s not important and knowable!
Where can I get the facts?
I mentioned in the post of “Why people with high IQ prone invest failed“: It is easy to refute all the opinions in this world, but the question is what is your own opinion? What is your factual basis?
And how to get the facts? Just as I described in the previous post “Reading is irreplaceable and necessity of for investors“: It is usually necessary to be obtained by reading.
However, the question is what I advocated in the post “Investors should stop worshiping celebrities“:
- The factual verification is the basic moral standards that the media must obey. If the starting point is not based on facts, and the comments and opinions generated are not valuable.
- Just as I have repeatedly reminded the investors in my blog and the context in my books that all investment research must be based on the facts, there is no fact or intentionally ignore the fact that the inferences obtained, such kind of investment judging is very dangerous.
What are the facts used for?
I mentioned in the posts three years ago “Do investing homework by yourself: Necessary conditions for successful investment trilogy“: three -step must be: collect related information and facts as much as possible, inference according to the facts, and finally make a decision whether to invest or not.
In my previous post “The uncertainty in investment“: Buffett said that when conducting investment research and making reasonable inferences based on various facts, what we have to grasp is “something is certain to happen, but we can’t be sure when it will happen.” In vernacular, it means; what investors should do. The homework is based on various facts, just infer that the stock price is lower than the intrinsic value. Sooner or later, the stock price will reflect the expected price level.
Conclusion
For example, what I mentioned in “Thinking cannot be outsourced“: As an investot, how to “think independently”— to develop the habit of reading, analyze and judge according to the facts, do not pay attention to various predictions or investment reports. Shut down your TV, and then spend time to do your investment homework every day.
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