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35+ years as a private investor, college finance/economics adjunct lecturer, corporate project engineer and business development strategist, individual and small business tax preparation. Corporate experience in communications and energy BS Mechanical Engineering - Carnegie Mellon University MBA... More
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  • The Great Investors Are Always On The Job

    Everyday information overloads the left brain. The DIY investor must synthesize all that data using a detective-like style; knocking on doors, pursuing leads, following up with interviews and verifying the claims that are made. Using that everyday data, refining it down to investment information, a true investor is always on the job.

    Example: When Sam Walton decided to expand Walmart's reach into a new territory, he would hop into his airplane and take a look at the traffic patterns of the area where he was considering to erect his next store, from the air. He coveted simple everyday information and was always "on the investment job." When he vacationed with his family, he visited as many retailers as he could, not just his competition, but all retailers, looking for ideas to transplant (a euphemism for legal theft) into his own stores. They included parking lot layouts, in-store traffic patterns, kiosk layouts down the larger aisles and which impromptu, salable items to display to the impulse buyers as they waited in line to complete their transactions at the store. The great investors are always on the clock, observing, informally interviewing managers and listening to, and questioning, the patrons of the business.

    Wall Street analysts, the Business newspapers, the Business cable networks and the investor message boards are not the only venues for garnering investment ideas. Talk to and listen to your family, your friends and neighbors about their experiences, their jobs, their school work, their hobbies and especially where they spend their money.

    Peter Lynch, the Fidelity investment manager who ran the flagship Magellan Fund, received some of his best investment advice from his wife and three daughters. After a trip to the mall, Lynch would casually quiz them on where their best retail experiences occurred, but he did not stop there. He would follow up with a visit to the company, where he and his cohorts would interrogate the senior management as if they were applying for a job in Lynch's portfolio at the Magellan Fund.

    So next time you are at a barbecue with the neighbors and family, get that little black detective's book out and seek out your next best investment idea.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jun 07 3:09 PM | Link | Comment!
  • Investing Is A Do It Yourself Art

    For a while there was this bit of unconventional investment wisdom out there that defied conservative diversification of one's assets. It was a slight modification of an old hackneyed expression. "It is OK to put all of your eggs in one basket, as long as you watch that basket very closely."

    Well, that is as imprudent as the conventional diversification strategy it aims to counter.

    Investing is an art, not a science, especially when you are dealing with an imbalanced table that is referred to as "the Street."

    The herd instinct prevails in investing; bonuses are paid on how well one does against the averages and the averages are determined by the big money that follows that herd instinct.

    Take a look at an investment theory/methodology offered in a book entitled "The Intuitive Investor." It is written by Jason Apollo Voss, who also has a website where he blogs about his theory.

    There is no magic formula, no shortcut to wealth, no gurus, no reliable patterns as the technicians claim. You have to watch the charts and listen to the gurus because they do motivate others to act in certain ways and that moves markets. That does not mean you have to believe in them.

    I do believe in a few precepts, the biggest one espoused by J.P. Morgan, whose family is buried a few miles from here on the edge of Hartford, CT.

    His statement, which really was an observation when he coined it was "I made a fortune being early." I do believe in both being early in and early out. The greedy can take the last ten or twenty percent.....and I want to be in before the herd arrives so I can be watching and not acting when things get frenetic.

    An example:

    I made money in Enron. I sold it when things got ridiculously priced and there was hype everywhere. When I saw them trying to monetize futures in bandwidth, I knew something was inherently wrong. So I sold in the summer of 2000 and I was really angry with myself when I saw the price continue to rise substantially after I sold. But I stuck to my intuition, which like anything else, is learned.

    I do not consider myself anywhere near the level of the investing mavens that appear on this and other boards, but I do adhere to my "intuitive experience" of thirty five years, observing the moves in stocks, bonds, commodities and currencies.

    You should study your own "self" the most, how you react to situations, gains, losses, mistakes, surprises, etc.. Listen to others, even the elitists that seem to think they know everything, but RELY on yourself only.

    Jun 06 4:01 PM | Link | 2 Comments
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