Book of Wise Investors

“There is a huge difference between the business that grows and requires lots of capital to do so and the business that grows and doesn’t require capital.”

When you hear mutual fund companies advising to buy and hold so that can reap the almost guaranteed returns from stock markets 40 years down the road, what they did not tell you is that their so called professional money managers actively engage in short term trading so that fund A can beat fund B in annual returns.

When should you really buy and hold on for a long time, almost forever?

It…

Well known investor Jim Rogers mentioned in Economist Conferences’ third annual Asia CEO Agenda about great opportunities in places like Myanmar and Sri Lanka, and especially China.

But he has reservations about Indian market, giving reasons such as bureaucracy and infrastructure problems. As in a place with less than ideal infrastructure like mentioned here, how can you start a business to sell something or provide services?

Reasons given for investing in Sri Lanka includes ending of a 25 years war with Tamil Tiger rebels while that for Myanmar is an educated population endowed with vast natural resources.

As…

People have always likened investment in stock market with gambling in different areas other than casinos.

Now let us look at what other well known names who built their fortunes from investing in stocks have to say.

If you are an investor, you are looking at what the asset – in our case business – will do. If you are a speculator, you are primarily forecasting on what the price will do independent of the business.

Warren Buffet

Economics isn’t a theoretical academic disciple that is out of touch with the real world. In fact, some basic and essential knowledge in Economics enables you to interpret crucial economic indicators which in turn assist you in tracking down investment ideas. The details of which shall be further explored in this blog.

After all, the prices of all goods and services we purchase, from food, energy, automobiles, clothing, and new apartments determine the profitability of businesses involved in procuring them. A sharp rise in oil barrel prices somehow translate into a few billions dollars more of profits for major oil…

Remember during the good old days of high school time, in the learning of basic sciences, classification is one common component among all science subjects, from Physics, Chemistry, and Biology to even Geography.

By using classification, information and knowledge are more manageable. In Chemistry, specifically organic Chemistry, organic compounds are grouped based on their functional groups, and each functional group react in a specific way. Of course, there are a dozen ways to group organic compounds to other features. But as Chemistry is a disciple that deals with the study and prediction of reactions between matters, this method of classification…

Engineers, scientists, monks, economists or pastors looked at this world differently. In other words, they have different perspectives by which objects and events are seen as.

To be a wise and successfully investor, you need to look at the place we live in through an investment paradigm.

When a hard core engineer walks into a Starbucks café, different images and sets of questions run in his head from an investor.

Looking at the coffee maker, questions that ran through the engineer’ head are what are the raw materials that are used for its constructions? Metal and plastics, specifically what type…