As U.S. elections are coming to a close, some investors might be anticipating sudden changes in the stock market direction. To keep it simple, here’s a brief passage from Kenneth Fisher’s Forbes article from June, 2015.
“Playing purely historical odds, for a strong 2016, hope for a Republican; if you prefer a heady 2017, hope for Hillary.”
You can find the full article at:
[ After opening the above blog post, Click on the 2nd blue highlighted link that will redirect you to Forbes ]
All in all, the article is a marvellous synopsis of Kenneth Fisher’s studies into political party wins and stock market gains over a period of decades.
For simple display of the power of statistical conclusions, today’s morning Eastern Time headlines in http://www.theedgemarkets.com/my read;
“KLCI slips as fresh FBI probe into Clinton emails jolts markets”.
Despite calculating the odds, making an investment decision based on statistics is only part of the process for all great investors. We move on to quote another prolific investor.
“All the correct reasoning in the world is of no benefit in stock investment unless it is turned into specific action” - Phillip A. Fisher
“How to decide on an investment?” is basically the question. One may easily find numerous sources on this topic on the internet.
The point to be made here is acting on a well researched and thought-about investment as the primary way to do well. We emphasise “acting on” as many investors tend to have good information but typically forgo them for a hyped up investment opportunity.
[ In example, you may have waited for a stock i.e. Parkson Holdings Bhd to hit a certain predetermined value/price, but because there was a new hyped up IPO coming up, you forgo your well thought about target for a company with vague or no track record. The same would apply for alternative investments as such property investment. ]
Long term (LT) investors may be regarded as the boring herd in the investment world as most decisions are made only after ensuring an investment opportunity fits every preset criteria. In other words, a LT investor typically has made up his/her mind as to what qualifies as a good investment, then he/she just waits patiently to grab the best opportunity that comes by. This gets boring as the criteria set rarely changes and the stories told usually go around the same bush.
However, “waiting” as above means keeping yourself up to date with all relevant latest news and continuously keeping an eye out for those targeted investments. Rushing into any investment has more often than not led people to terrible results.
[ Note: Once an investor determines an investment criteria set/list that fits him/her the most and is successful at applying them, they stick with it, but there will come a time to evolve those criteria ]
An interesting related article from 2015:
The Janitor that amassed a $8million Fortune-
[ Note: Globally investors are currently predicting a non repeatable stock performance since 1930s, however, looking at history, the more accurate a prediction the more likely it misses ]
Stocks In View
PARKSON HOLDINGS BHD (S) (5657.KL)
- Annual Report 2016 is out; http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=177482&name=EA_DS_ATTACHMENTS
TUNE PROTECT GROUP BHD (5230.KL)
- Despite the suspicious resignation of former CEO and CFO, Kumpulan Wang Persaraan (Diperbadankan) has been increasing their stake since July-October by about 0.3% Direct & Indirect interest.
Until next time, happy value investing.
[DISCLOSURE: The writer currently owns minority stake in Parkson Holdings Bhd among the mentioned stocks as of 31/10/2016 under his personal account. JR Capital LLP has no minority interest in mentioned stock as of mentioned date.]
[DISCLAIMER: Everything stated in this blog is purely the opinion of the writer and any decision taken should be based on sound judgement with risks fully born by the decision maker. The writer shall bear no responsibility for any losses due to adherence of advices blogged by the writer or any commenters. Informational discrepancies are possible and will be corrected if any.]
