Sunday, February 5, 2017

Investor vs Speculator, Which One are You?

I participated a cross country run held at my daughter's primary school on 14-Jan-2017.  It was very crowded.  Of course, I met a number of old friends there.  One of my friends, who is also a reader of my book, asked me on whether I am writing a new book.  I told him that, instead of writing, I teach so that I could guide my students proactively according to my investment philosophy instead of letting them to guess based on their perception on I wrote in my books solely.

He started to share with me about his view on Oil and Gas and inquired for my opinion.  Be frank, I hate to give any opinion when being asked.  This is because stock investment is very personal.  What you thought is not necessary to be the same as what I considered.  Therefore, I replied generally that, to me, O&G is a cyclical industry and I hesitate to look at this industry simply because I have to spend time to seek for in and out timing.  It is a waste of my time.  He was surprised as he thought stock investment is a money making game via buying and selling of stocks.  Of course, he is right basically.  However, the key here is the investment mindset to have.  For those who understand my investment philosophy know that I treat stock investment as a long term money printing machine and this "machine" fulfills its objective day and night without any of my involvement.  As long as it functions well (strong financial fundamental is intact) and continues printing money for me, I see no reason why I want to dump this "machine" even the market is biding a ridiculous high price for it.  However, O&G stocks are not meeting the objective of the machine that I need.  At least this is to me.

My friend's eyes had become brighter when I mentioned long term money printing machine without any personal involvement and would be interested to participate in my next course enrollment.  I am not making an advertisement here.  All the while, there is only a step different to become an investor or a speculator but the result could be very much different.  It is totally up to you what kind of mindset you want to adopt.

No matter which side you opt for, the key is that you have to know what you need and sharpen you skill as much as you can so that you can make your own judgment but not based what the others are talking about.  Do note that the others do not bear any responsibility of your investment result but yourself.  If you listen to the others blindly without justification, you have to face all the consequences.