Wednesday, 12 December 2012
ARE U A SPECULATOR OR AN INVESTOR ?
WHO HAS MORE RISK ?
This is an extract from William O'Neil :-
"" There are two often-misunderstood words that are used to describe the
kinds of people who participate in the stock market: speculator and investor.
When you think of the word speculator, you might think of someone who
takes big risks, gambling on the future success of a stock. Conversely, when
you think of the word investor, you might think of someone who approaches
the stock market in a sensible and rational manner. According to these conventional
definitions, you may think it’s smarter to be an investor.
Bernard Baruch, however, defined speculator as follows:
“The word speculator comes from the Latin ‘speculari,’ which means to spy and observe.
A speculator, therefore, is a person who observes and acts before [the future]
occurs.” This is precisely what you should be doing: watching the market
and individual stocks to determine what they’re doing now, and then acting
on that information.
Jesse Livermore, the greatest stock market legend, defined investor this way:
“Investors are the big gamblers. They make a bet, stay with it, and if it goes
wrong, they lose it all.”
After reading this far, you should already know this is
not the proper way to invest. There’s no such thing as a long-term investment
once a stock drops into the loss column and you’re down 8% below your cost.
These definitions are a bit different from those you’ll read in Webster’s
Dictionary, but they are far more accurate. Keep in mind that Baruch and
Livermore at many times made millions of dollars in the stock market. I’m
not sure about lexicographers. ""
In real life many started to speculate but ended up as reluctant investors. Worse still the
stocks held r not investment grade or its fundamental is fast decaying...
We put in so much hard work n homework n finally decided to buy. So after a buy is executed,
please take note that serious work begins because risk starts.
From 1st 4 hrs to 2 days, that stock must, must not disappoint in terms of price.
If it fails to move up, rush in n 'berlanja' to the buyer ! This is o/h of investing biz.
I like these Fine words, Protect the downside, upside will take care of itself.
Because in down trending stocks, 1st loss is always the best loss.