Friday, July 8, 2011
B for Bears equals to B for buy!!
Recently I came across an article about Warren Buffet and his strategy for investing. It states that he buys at low and sells at high, and looks mainly for the value. So very true and lucrative. Isn't this the basic fundamental strategy while trading? Like Nicholas stated in this article about Buffet nodding yes to what he says even I do not understand the planning of many investors that go haywire. I really feel the need to see how can people invest in the stocks that compel them to suicide. What environment they are playing in? Is it not normal for a person to see whats profitable and can get bread to the table?
Of course when I write this it does not mean that I am extremely profitable in all the scrips that I deal with. I too have suffered my share of losses and dips,but I do make sure that I am not buying in bulk for the equities that are totally uncertain. Now its our study and judgement what companies are performing and place a stop loss. When I entered into trading like any other new-bee I was also going after blue-chip companies and the brand names. But they did not give me consistent returns all the time. Many of my scrips in software industry showed me the bearish results. Learning from this I started analysing small companies and putting my money on it and Ta-Da....got results. That made me think that it proved that brand names not always are the best, of course the more you invest the more you get /or lose. But ignoring the small and mid-cap performers is sure a mistake. No doubt certain big names have given me big money, but many small or unacknowledged identities also have given big profit and the main criteria for small companies is the amount required for investing is also small per scrip and thus they give large number in quantity. This has helped me in selling my scrips at various bullish environment, making profit in slots. This also holds beneficial when the share splits. We get double the quantity and increase the chances of selling in slots.....which sure attracts more benefit.
Coming back to Mr. Warren Buffet strategy we need to think or act in going for Canadian mining stocks for less than the value of their proven deposits (buy recommendation)...for taking a big step closer to becoming rich :D!