Picking Stocks as if Your Real Business

                       

I have found and investigated over 1,600 investment strategies. There are many an investor can use, in which he can imagine they would be his own business.

                       

The investor can take the same attitude as any owner would. The strategy can revolve around what he wants the company to accomplish. Everyday prices and values never enter business consideration while the business is on a growth path.

                                           

Short-term, quick-buyers and sellers often are trading company names. They really have no clue about the business. Most of the financial reports they see are little more than hearsay and gossip from Wall Street pundits looking over each others’ shoulders.

                       

Always remember, the clunker stock the short-termer is selling is probably considered a diamond-in-the-rough by the buyer. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Stock Market’s Psychology

                                        

Market psychology is always a serious factor that dictates discipline in investors. Most take what profits they see on the way up, and run; no matter what their original strategy or purpose was for buying that security. So the odds of achieving huge winnings are always poor.

                       

And besides, it is almost impossible for an outside observer to properly evaluate management. Analysts who make it their profession cannot evaluate managers wisely from the outside. Why believe the public can?

                       

I have found the odds of this sweepstake are too steep in the long run. I suggest investing in low-cost index funds as your best bet. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Top-Winner Stocks are Rare

                     

It's harder to pick stock winners than you may think from reading financial media. Everyone believes they can, but after all the effort, how many stock winners do folks really find?

                       

You hear about big winners but how many of those are available? How many are recognizable early on? It’s always easy to find those who did, after the fact.

                       

Moreover, when you look at these relatively small numbers of success stories, you find that they had their periods of ups and downs. The profit numbers look excellent only after years of market wear and tear. How many investors had the stomach and discipline to buy those stocks at their lows and hold on to them to their highs?

                       

None of the successful securities had gone up in a straight line. Most hit bad cycles when most of the original holders lost faith, deserted ship and sold.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

                   

Disciplined Strategy Investing

                       

A simple idea lets individuals know how to be better investors.

                       

I have found from experience that the average investor does well by avoiding trading extremes. That’s possible by sticking to a disciplined, favorite strategy and then forgetting daily market prices. 

You don’t need constant

financial news, unless your investment strategy calls for it, Relatively few strategies do. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Investing Moods and Sentiments

                       

Moods are relatively long-lasting emotions. Sentiments are shorter-term.They both can affect how stock market cycles react and  precipitate booms and busts.

                       

That’s because cycles can easily grow into the fully grown varieties. It’s the way minor bear markets start and deeper recessions fester. Given enough impetus and human error, financial meltdowns will eventually occur, as I have outlined in my previous reports.

                       

It’s the reason why astute, wise politicians seeking to prevent a deep recession, never make it a practice to single out industry as scapegoats when they want the economy to recover and produce jobs.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Summary: An Explanation of the Financial Meltdown

                     

The Mark-to-Market accounting on which I commented in my recent blogs resulted in global damage. All true investors got run over by this mark-to-market onslaught.

                       

There are two kinds of investors; traders who need daily quotes which can be unrealistic. And long-term investors who get misled and potentially hurt, if they act on those abhorrent, volatile short-term prices.

                       

The financial meltdown was certainly an error by government appointees thinking too short-term and subjective, and therefore, prone to panic–driven decisions.

                                           

This created havoc among small and large investors in pension funds, who look to the long-term and are not interested in daily pricing, (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Wall Street Haters

                       

There is constant Wall Street bashing from politicians. I have myself directed some criticism at Wall Streeters who may have contributed to actions that helped foment financial panic.

                       

But I always have made this distinction about Wall Street: It’s both an investment and also a constant-trading medium. Both are essential. But trading aspects can go to extremes. When extreme actions occur, there can be potential danger. It is thus essential that the public understand how Wall Street operates.

                       

In that regard, you must always remain disciplined in your use of investment strategy. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter)