Is Ze Market for Suckers?

Came across this interesting blog entry from this posting posted on the Berkshire Hathaway Shareholders group: The Stock Market is for suckers

I'm going to highlight some of the points mentioned in the blog: The Stock Market is for suckers

You can have as long a term horizon as you want, but like most other long term plans we have, most peoples lives dont match up to their “horizons”... And boy oh boy, if life hits you hard when the market is down, you make a withdrawl and you wont ever catch up.

Hmmm... understanding one's own personal finance is very important, isn't it? Tiok boh?

Don't underestimate this issue lor. For example, what if our children needs educational fund? What if an emergency happens and we do not have other funds to cover that emergency? Cashing out due to circumstances such as these could turn our potential success into an immediate failure if and when the need to make the withdrawl happens when the market (and ur portfolio) is down!

Wall Street has done an AMAZING job of creating conventional wisdom . “Buy and Hold ” is the 2nd most misleading marketing slogan ever, after the brilliant “rinse and repeat” message on every shampoo bottle. We as a country have fallen for it. Every message from every marketer of stocks tell us. Young or old, if you can hold for the long term, things will work out for you.

That is total bullshit. Its for suckers.

Totally agree!!

You cannot simply hold any shares! See this blog entry of mine: I wanna Hold your hand..

Simply put, If you buy and hold an investment gone bad, most likely than not, your investment would most likely go bad too!

So why do they want you to HOLD these shares gone bad?

Simple lor. They want you to be ze sucker!

If you are going to trade stocks, you just have to follow one rule and remember one thing. That rule is always have a definite knowledge advantage about the company you are trading, and always remember that every stock transaction has a sucker, and you have to know whether its you or the person on the other side of the trade. No one buys a stock from your, or sells one to you knowing they are leaving money on the table.

The bottom line is that unless you plan on making it a full time job to do your research and put yourself in a position to have an advantage, you are going to get your ass kicked at some point by someone who does. You just have to hope that it doesnt put a big financial hurt on you when it happens

Another good point, eh?

The same logic applies to funds. Funds are in the business of making money for themselves first. You 2nd.

Ahem! Funds are in the business of making money for themselves first.

Same rules applies here!

Repeat after me.... Funds are in the business of making money for themselves first. You 2nd!!!

Thats why I buy stock in public companies that relate to my other business entities. When i pick up the phone and call the CEO of a company i own shares in, they call me back very quickly. When I ask if there are business opportunities that make sense for the company and another company of mine to work together, I wont always get the business, but I will always get a meeting. If Im smart about the investments I make, the more important returns come from the relationships with the companies than the action of the stock.

Hmm... investing from a business perspective?

If the best you can do is buy shares that are going to be continuously diluted, then you are merely a sucker. There is a good chance that the shares you bought came from shares an insider who got stock options. You just helped dilute yourself with your first share purchase.

Ahhh.... beware very much of this issue. Private Placements, ESOS.... these stuff dilute earnings.

Very, very, very important issue hor.. Do NOT end up buying diluted earnings!

Such exercises are done at the very expense of the minority shareholder!

They make a sucker out of the minority shareholder!

Surely you do not want to be a sucker, rite?

:D