Investing It My Way

Blast from past.

If ever there is a need for a theme song for investors, it just simply has got to be My Way. Here is why I think that this is such a lovely song. :p

Regrets, I've had a few,
But then again, too few to mention.
I did what I had to do,
And saw it through without exemption.

In our life as an investor, we are bound to have regrets or mistakes. No one goes through life without making a single mistake. It's just not possible. And in investing, since mistaks do cost us tons of money, we want to make very sure that the mistakes are kept to the bare minimum and besides limiting the amount of mistakes, we do not want any of those mistakes turn into a massive mistake that it wipes us completely out of the investment game. Think of what Sinatra is singing here 'Regrets, I've had a few (keeping the mistakes to the minimum). But then again, too few to mention (ah, the mistakes made are just minor mistakes or mistakes that would not be damaging our heart and soul!).'

The song continued 'I did what I had to do and saw it through without exemption'.

In investing, did we do what we had to do? If our investing philosophy is all about intelligent investing (the purchase of shares in good businesses when market prices were at a large discount from underlying business values) whenever we make an investment, is our investment done in the most rational decision? Or do we make an exemption and sacrifice the pricing factor by overpaying an investment just because we ass-u-me that a market rally is about to happen? Or perhaps it would be better to stick to our game plan, and do what we had to do and do it without exemption?

I planned each charted course,
Each careful step along the byway.
But more, much more than this,I did it my way.

Planning each charted course, each careful step along the by way. Did we plan enough in our investments? Were we careful in each of our investments? Or did we sacrifice a tiny little weenie bit in our margin of safety? Did we take unwarranted risks in our investments?

The very last part, I did it my way. Think of Warren Buffett's Advantage. Buffett's advantage is that he knows he is right because his reasoning his right and that sometimes the manic Mr.Market might not agree with him. So if we made the best logical reasoning (very crucial here.. the issue of how dead sure are we that we are right?) then it doesn't matter if Mr.Market agree with us or not. For we have done it our way, the right way!

Yes, there were times,
I'm sure you knew,
When I bit off more than I could chew,
But through it all, when there was doubt,
I ate it up and spit it out.
I faced it all and I stood tall
And did it my way.

Ah, there were times, I'm sure every one of us has faced it before, the making of mistakes.

So what do you do when there was doubt?

Hmm... interesting issue.

Being wrong or being in doubt?

Well when we are wrong, we know very well the right thing to do in life is to stop being wrong.

But when we are in doubt, ah there is a mighty huge difference because we do not know whether we are right or we are wrong.

This part, for those trading in the market, it is very precisely clear that they never, ever to trade in doubt.

But for investors, this issue is not as crystal clear.

Take for example, a company having a setback in their business operations. The 'doubt' for the investor is defining the setback. Is the setback temporary or will the setback turn into a permanent issue?

An investor who assumes the setback is a temporary thingy, might treat it as an investment opportunity.

However, if the setback turns into a premanent issue, then the investor has simply made a wrong investment and what's more damaging, in such incidents, it takes a far longer time for the investor to realise that the setback is permanent.

And by then, the mistake would have turn so huge that it might kill the investor in a single blow! This is why some investment gurus teach one not to invest in a stock whenever we are in doubt!

And not forgetting, 'I ate it up and spit it out'... when we are wrong in our investment, we have to 'spit it out'. That is the investor has got to admit their investing mistakes and cut-loss!

So sing it out loud....

And now, the end is near,
And so I face the final curtain.
My friends, I'll say it clear;
I'll state my case of which I'm certain.

I've lived a life that's full,
I've traveled each and every highway.
And more, much more than this,
I did it my way.

Regrets, I've had a few,
But then again, too few to mention.
I did what I had to do,
And saw it through without exemption.

I planned each charted course,
Each careful step along the byway,
And more, much more than this,
I did it my way.

Yes, there were times,
I'm sure you knew,
When I bit off more than I could chew,
But through it all, when there was doubt,
I ate it up and spit it out.
I faced it all and I stood tall
And did it my way.