Phil Town, the best selling writer for the book “Rule #1″ post an answer to my question today at this post.
After completing Phil’s book, I also read his ENTIRE blog, which is as precious as his book.
He totally change the way I think about INVESTING (which you know I sucks from this post ‘My trading and investing story Part 1‘).
His book and his blog contains too many useful information that I can’t summarize here, so you MUST read it yourself! A friend recommend this book to me in October and I have been recommending this book to everyone that I have meet.
I want to share 2 things with you today.
1. Why long-term trader THINKS differently than a short-term investor?
I have always been a short-term trader and the reason for that is simple. It looks like I have more control on the short term than the long term. I find it very hard to imagine 3 years from now, 5 years from now or 10 years from now. Or maybe you can say, I am too lazy to wait 3 years from now. I want it now!
So, short-term traders are those who find that investing for the long term is RISKY (hard to predict) and thus they prefer to trade for the short term. They also find ‘long term’ too long to wait for.
Then after reading Rule #1, I find out the long term investor (Phil Town and Warren Buffet), they are not investing in stocks! They are actually investing in BUSINESSES. This is very important. They are not actually investing in ’stock’, but investing in the business!
These guys (long term investor) find that short term market movement is very hard to predict but find it easier to estimate the long term prospect of the business.
Saw the differences now? Short term trader find it risky to invest long term while long term investor actually find it risky to invest short term. How dramatic can it be!
2. Short Term Trader is not an Investor, it is a Job (or Slave to the market)
I am a big fan or Robert Kiyosaki (although Robert and Donald Trump cheat my money for their new book Why We Want You To Be Rich). According to his CashFlow Quadrant, a real investor is the one that have money working for him and thus he will have more time and freedom.
On the other hand, a trader (especially day trader) is not an investor but a self-employed. He is doing a job everyday. There is no freedom. He is working everyday when the market open. If your goal is to achieve freedom, how can a trader probably going to give you freedom?
You probably won’t even have peace in the weekend when the market is closed. Why? If you have a big losing position Friday that you haven’t close, you will have to wait until Monday morning before the market continues. You won’t be able to sleep well and play well on the weekend!
Subscribe to My Blog in a Feed Reader or simply
Subscribe by Email
Brother, i totally agree with u that this is a very good book for investment, value investing + technical is a good combination. If just technical analysis, i feel like it is seems like gambling ( if u r applying Dr Elder Alexander method (3M – Mind , Method and Money management) very well , maybe the chance of making good money in Stock marketing is positive). Follow the 2nd richest man in the world Warren Buffett way will lead you to become rich.Remember balance of life, 万般带不走,唯有业随身 – Andy Lau in movie 大只佬
But i dont think he had answer your question, not even close. the fact is these behind scene movement are what matters the most. how do we knew a company is hiding its true values? (underestimating the equity value by not reevaluating a company’s property for example) how do we knew whats the future direction of the company owner? how to look up on the ownership segment of a company? …etc etc.
Anyway, cant deny that Phil is really giving lots of info out from his blog. and hey! its EXTREMELY amazing how we can have interactive connections with our favorite author isnt?
Mr佛弟子,
You are the guy who recommend me the book Rule #1. Wahahaha. Today you didn’t come and 打坐！
And BTW, when are you going to return my Dr Elder book.
Mr Soufu,
What Phil means is if the BIG5 numbers look good, usually most things look good. The link of his post pointed to how he look at the 10-K form.
You can find 10-K (annual financial report) and 10-Q (quarterly financial report) on
http://www.sec.gov/edgar
Phil book and Blog is our first step towards investing, and we still need a lot of relevant reading in order to strengthen out knowledge. I am now reading ‘The Five Rules For Successful Stock Investing’ by Pat Dorsey. It is very good and come from the same school of thought as Phil Town, Warren Buffet and Ben Graham.
I have also read Buffettology by Mary Buffett and Security Analysis by Benjamin Graham.
And since I have been trading for a long time (although lose a lot of money) me experience and understanding on the stock market do help a lot.
So keep reading and getting experience.
正所谓书中自有黄金屋，书中自有颜如玉。。人生中不外乎钱银同女人。。
i’m the gambler type. still not up to the investors billing yet…..
cb
I don’t like to gamble and only invest on fundamental reasons.But it seems like i can’t find any blog on fundamental analysis related to KLSE until i found this!
http://boyboycute.wordpress.com/
Any websites related to fundamental investing in KLSE?
Most blogs on KLSE are speculative blogs.
http://www.icapital.biz The only source of information I trust. BTW, sin-chew business and the star business SUCKS!
hey ah yap
i read the book on rule#1. I understand his BigFive numbers and i knew that he recommends to go check out those numbers from MSN money. However, those are US stocks. do you know if there is any sites that serve the purpose like msn money but it is evaluating Malaysia Stocks? Hope you can reply and thanks for introducing such a informative book. thank you
You can get 5 years of financial data from KLSETracker.com. It is provided for FREE if you a client of OSK or HLeBroking. You can only get Revenue, Earning & Equity. You can’t get the exact Free Cash Flow. And there is no ROIC, the nearest is ROE. ROE and PE is available for whole live of the stock. If you are looking for Rule #1 stock in KLSE, have a look at TONGHER, PIE and VADS.
You are right. Intraday trader normally has no good ending story. I indeed feel it, and encounter it deeply, seriously.
If you really want to make some money or not losing money due to the market shakes (not milk shakes), you have got to be a mid/longer term of investor.
My sincere pledge on. Honey, and a long sexy blonde babe time, of my hand to.
I bought Phil Town’s book and took his advice.
I lost almost my entire life savings!
I wonder how many other people have lost most of their retirement by taking his advice.
He is a scam, just like all the other people who tell you how to get rich if you only buy their book. PHIL TOWN SUCKS!