Tue, 12 May 2009
Troy’s Blog
What I have learned so far. Part 2.
Reading the papers tells you what’s happened, and broadly what is happening but they don’t fortune tell. I still love reading the FT. I can’t help myself. It’s good reading but more and more, as I am seeing that they report what’s happened in the news the week previous, and you have to be able to use that to try to predict what’s happening overall. I can get bits of info like Bovespa is up 75% since October’s crash. Great! I have only just bought into their recovery though through my last trade (DB MSCI Brazil ETF) so I kind of missed the boat on that one. But you can’t read the FT and expect to have a head full of investment ideas at the end of it, at least I can’t. Tell me if you manage to decipher it any better.
There is a difference between a trader and an investor. This is something very useful that I have learned from the 4WM. That’s real wisdom. A trader is the person that takes the cash available, and in more ways than an investor will, gambles it. Calm down… I know I used the gamble word, I now how it gets the hackles up of people that trade, but honestly, look at it. It’s a quick in and out, “trading on rumour, selling on news” making an all in, get rich quick, then move on short. That’s not exactly the same as gambling, but what I am saying is it’s more like gambling than investing over time. Investors are looking for a long-term gain and this can take years to get a cushion portfolio to trade in and out of at the right times, this is ultimately what I am trying to get right. So what I posted back last month about going in and out with credit card money, that was a reaction to trading not investing. I could see the market lunging forward at 10, 70 and even 300% in a week and wanted to ride that train. But that’s exactly where people loose the shirt off their back and ruin their future. Some people are good at it, make lots of money and others fall by the wayside. I would like an element of that in my investment, but not yet as I am still way too inexperienced to work the system. It’s easy to get green eyes though, there are big numbers out there, but this is the thing, there will always be big numbers out there, but at a later stage I (you) will be better educated to take advantage of them, when the odds are reduced.
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