The previous post reminded me of something. My uncle once sent me a chain email about the economy and its predictability. When I first read it around 3 years ago, I didn't really connect with the message. Now, the email makes total sense. Read the email reproduced keeping in mind what happened over the past 1 … Continue reading The economy works in a predictable cycle…
Recently, the market has come down quite a lot mainly due to the European debt crisis. What are investors to do? A) Sell all your stocks, even at a loss B) Hold on to your stocks as they are fundamentally strong and average down when the opportunity arises C) Sit in a corner and pray … Continue reading Oh no! The markets are down!
Under the "What is value investing" post, the 1st step to do is to analyse the company fundamentally (both quantitatively and qualitatively) by looking at the financial statements to determine the quantitative part and asking certain questions to determine the qualitative part of the company. The company must also have a wide moat or competitive advantage … Continue reading What to look out for when investing in a company?
A lot of people think that investing is risky. So, they would rather put their hard earned money in the bank and not lose sleep by investing in the stock market. Warren Buffett has this to say about risk: "Risk comes from not knowing what you're doing." So, if you don't know anything about the … Continue reading Are stocks risky?
Albert Einstein once said, "Compound interest is the eighth wonder of the world". Compound interest arises when your current sum of money earns a specific interest in the first year and the total amount obtained at the end of the year is allowed to compound for a specific period without removing the entire sum. The … Continue reading The power of compounding