Thursday, 27 February 2014
Read? Warren Buffett's Secret Sauce
CW8888: This is something retail traders (speculators) haven't learnt enough! Decades of wisdom in it!
Although his fame as an economist is global, Keynes’s stunning success as a professional investor is not well known, even among economists.
When I asked Prof. Paul Krugman after a Chicago talk last year if he was familiar with Keynes’s investment record, he replied that he wasn’t familiar with that part of his life. And this coming from a Nobel Prize winner who is one of the world’s leading Keynesians!
Utlimately, it doesn’t matter who takes the credit for long-term investing principles that build wealth without churning your stomach at every market turn.
If you seek long-term value in businesses that will be around in every market cycle, generate cash and dividends, you will probably make money. The key to success is not only holding onto those stocks through thick and thin, but holding onto the idea of selecting those investments with great care.
Posts
Bought Apple Stock in 1980? Held It? Don't Brag
ReplyDeleteFor every action, there is an equal and opposite reaction.
Hi SMOL
DeleteHeheh, I guess the equivalent today may be BTC & ETH ... price may drop from $20K to $200 ... but hey, maybe will be $2M by 2030!! Hohoho!!!
Spur,
DeleteExactly.
Both speculators and investors can make money - 5 Bitcoin Crashes
Its more whehter we want to admit its "luck" or pure acumen on our side ;)
"Investors" in O&G counters like Ezra and Ezion have made money. So have "investors" in Noble and Olam. That's provided they have taken their profits off the table ;)
Can we blame old school "investors" who may be now a bit worried about their safe and boring income stock investments with SPH and ComfortDelgro? Will they bounce backto former glory days? Or will they become the next NOL?
With hindsight (horse behind cannon), everyone is a genius!
In terms of economist-investor, I prefer David Ricardo ... smoother life & a much greater wealth accumulation (inflation-adjusted terms). The stunt he pulled at the Battle of Waterloo would probably land a modern person in jail for market manipulation.
ReplyDeleteKeynes was more of a speculator .... he almost lost it all ... 3X during the 1920s and 1930s.
What saved him was a cushy job at Cambridge, strong network with London financial industry, and that he evolved & improved his speculation over the decades.
Btw he had strong EQ & insight of human motivations .... he was angered at the Allies' adamant insistence on extremely crippling repatriations from Germany after WW1 & correctly predicted that it would lead to vengeance & a worse war for the subsequent generation.
Ironically Hitler & his politicians used Keynes' ideas & policies to transform Germany from bankruptcy & hyperinflation in the 1920s & 1930s into 1 of the top 3 economies of the world by the late-1930s.
Spur,
DeleteSame person.
CW considers Keynes a long term investor; you see Keynes as a speculator. Now that's thinking for yourself!
You prefer David Ricardo; I prefer Bernard Baruch :)
Why should we "have to" like the same person?
Its never about "labels". Or what we prefer to call ourselves.
If one's temperament is more suitable to be an investor... Be one!
Nothing is more sad (and stupid) where one has all the attributes and makeup for speculation, but chose to be an investor just because someone says so!
Be our own man :)
I would rather be the shepherd than the sheep.
I wouold rather be the landowner than the shepherd.
Keynes was failed speculator turning to long term investor. Right?
DeleteCW,
DeleteYou asking Spur right?
I knew you would say it so I deliberately left it out in my comment to Spur ;)
You saying it makes me a little bit taller...
Who likes to be plan B?
LOL!
Sorli, sorli...
I go face the wall now.
Keynes's CAGR investment return was 11.7% over 23 years so finally he made it as investor.
DeleteCW,
DeleteI take what I've said about less to poke you back!
Still got opportunities!
There are 2 groups of people in this world.
1) Those see got long queues assume must be good for them:
This stall sell Trading got Singapore's Top 10 sticker. I queue! Eh? This stall's investing critics say very good! I follow! Wait! This stall got passive investing? I heard my colleague say "bao jiak" one. OK! I try also!
2) Then there are the "crash got sound" people:
If Keynes had not tried speculation first, how did he find out it was not for him?
I remember I took up a LCCI book-keeping night class before NS before. Drop out after 2 weeks. Confirm I don't like dealing with numbers like that. Who knew decades later, I've learnt to see patterns in numbers when it comes to trading?
LOL!
The Moral of the Story; don't give up but change and try again. Most retail are wired towards LONG term investing to collect Panadols. Most started trading because the cyberworld is full of "Gurus" and disguised bloggers with commercial interests shouting loudly. I can. You can! Come. Come. Try your hand!
ReplyDeleteUncle8888 & SMOL,
ReplyDeleteHaha :) .... OK OK .... Keynes was a professional investor but a retail speculator ... he had the consummate gambling bug in him :) :)
Chest Fund was an endowment fund of King's College, Cambridge Uni that Keynes ran professionally (plus other funds for 2 insurance companies). He didn't bring his speculative urges into these funds where ordinary peoples' money was on the line.
Btw the returns of Chest Fund is excluding dividends, because Keynes refused to re-invest or add-in the dividends. He believed endowments are supposed to be used for the benefit of the Uni & students, and he made sure all the dividends were spent e.g. bursaries, scholarships, fellowships, etc. If he had re-invested the high dividend yields of the 1930s, the Chest Fund returns could easily been doubled.
However in terms of his own portfolio, as well as private syndicates (among the 1st hedge funds in the world) set up with family members, friends & other wealthy associates --- speculation was the name of the game!!
The 1920s was marked by speculation in forex & commodities, both of which bombed big time for Keynes. He almost became a bankrupt in 1920 & lost 80% of his wealth in 1928-1929.
In 1933, convinced that the new US president Roosevelt could turn things around, Keynes made large speculations in languishing small-and-mid-cap stocks. (I wonder if he knew John Templeton ... or maybe Templeton copied the much more famous Keynes in the news!) And he upped the ante using margin. Within 3 years, he managed to turn around his fortunes from about half a million to $30M (in todays dollars). And the rest is history!! :)
Speculators?
ReplyDeleteInvestors?
Duh!
Someone even better.
No need capital, only brains and charisma.
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ReplyDeleteI`m Charlie Bean and I live in Toronto Canada. I needed a loan to buy a house and I searched for a mortgage loan from all banks and I was denied and I loss hope of having my own house until I came across a post just as you reading my post now. I saw a post about a Financial Service Company who gives loan at 2% interest so I applied in STEAKLEY FINANCIAL SERVICES using their email steakleyfinancialservices@yahoo.com. And my loan was granted it was like a dream but was true and now am a owner of a house in Toronto and am paying the mortgage loan with no stress and I also requested if I can be granted a business loan and I was also granted. Now am living a happy life, I will advice you if you have an financial problems and you need money to settle it so you can pay with no stress just contact Steakley Financial Service at their email Steakleyfinancialservices@yahoo.com.
ReplyDelete