Investing

Super Investors’ Secret Recipe   

I am writing this article to be included in my book which will help investors to improve their investing skill to make more money from the stock market.

There are always more losers than winners in the stock market. Among the winners, there are only a few super investors.

Super investors’ secret recipe is optimism, confidence and entrepreneur spirit. Can one be trained to have these qualities?

Frankly, I am not sure that one can be trained or acquire these qualities by try and error in practice. Perhaps one must be gifted with these qualities and improve on them through regular practice. Whatever it is, one has to keep trying and learn from past mistakes to improve.

As I said before, 3 persons can buy the same share at the same time and yet each of them will have different result. One is a speculator, another is a short term investor and the last is a successfully long term investor. The first 2 persons will not make much money but the last one should be more successful.

Here I want to write more about the successful investors’ qualities.

Optimism

If you are a pessimistic person, you will not go anywhere very far because this attitude will stop you from moving forward. But if you have a natural optimistic attitude, you can go to the moon.  

All successful investors must be optimistic, like an entrepreneur always willing to venture and take a chance. He must develop some business sense so that he dares to buy when a good share is beaten down for no good reasons. In fact, investors can make a lot more money in such a situation than waiting to buy when it crosses the 200 day moving average.

Professional fund managers and chartists: Statistics show that almost all professional fund managers have very poor performance record. With no disrespect to them, they must examine their track record to see why they are not performing so well as they like their followers to believe. One reason is that they are not optimistic. They will only buy when the price has gone higher crossing the 200 day moving average. They are not optimistic enough to buy when the price is at its pivoting or turning point of the trend reversal.

Super investors always have the entrepreneur spirit to take a calculated risk. The stock market is an adventure in business.

Confidence

If you always have no confidence, you will not go anywhere very far because this attitude will stop you from moving forward. But if you are a steady and confident person, you can achieve almost all the things you want in your life. 

Super investors always have the confidence in understanding  what they read between the lines of any financial report, bearing in mind that all analysts’ reports are usually buy recommendations.

Have you ever seen a sell recommendation before?

Super investors dare to make instant decision to buy or sell.

They always remember the stock market has a quick way to punish false confidence, arrogance and recklessness.

Critical thinking

Critical thinking is the ability to think clearly and rationally about what to do or believe. It includes the ability to engage in reflection and independent thinking. Critical thinking is absolutely necessary especially in share investment.

In this information age, everyone can suffer from information overload. Information will come to you through SMS, whatsapp or email while you are asleep.

Every day I receive share recommendations from investment banks. Since I do not have unlimited funds to buy all of them, I have to examine their recommendations carefully and critically.

Acknowledgement: The basic idea in this article is from articles posted by Stockmanmy.

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