MAKE MONEY BY DOING NOTHING
June 23rd 2008 00:00
Shhhhh, pleasee, silence! I'm making money...zzz
But can anyone really make money by doing nothing? Well, maybe not. But thousands (whether they know it or not) are actually making a lot of money by doing almost nothing at all. And who are these blasted sons of b…’s who are so darn lucky they make money even when they are sleeping?
These canines are not yet trained to count money so, I wasn’t referring to them.
Actually, all of us can make money by doing almost nothing at all. How?
Buy the right stocks.
Buy the right stocks? Is that it? Just buy the right stocks? Essentially, yes. Just buy the right stocks and do nothing.
It may sound crazy, but if we consider that the world’s richest man (Warren Buffet) is advocating “Value Investing” the idea become a little less nutty. But this discussion is not about Buffet and Value Investing. This is about the words coined by Benjamin Graham – the Columbia University professor who is believed to have taught Buffet Value Investing.
Graham identified the biggest problem in investing. He said: “The investor’s chief problem, even his worst enemy, is likely to be himself.” If this is so, and I am inclined to believe that it is, then it follows that doing nothing may actually help the investors.
And why is this so? If we really want to know why, we need to throw vanity out of the window and allow a little bit of honesty shine into our world – even just to our own private selves. If we have already done that and we are currently invested, then, let’s try to look back and see how we reacted in the latest market developments.
If we are honest enough and if we know what we are supposed to be doing, then we can tell if we are our own biggest problem. And yes, this has to do with Fear and Greed.
Having learned his lesson well, Buffet is advocating that investors should buy stocks because of the business the company (which shares they are buying) is in and how that company is managed. Not because of the price movements of its shares.
I realize that momentum traders will disagree with this concept but then, the way value investors and momentum traders disagree with a lot of things, they might as well belong to different hemispheres.
Again, I am not the expert here remember? So, I am not about to even guess which one has the best investing concepts. All I am doing here is show how things are being done by other people to make a lot of money. And people in Warren Buffet’s side of the investing world are saying that inactivity could actually be helpful.
I will be remiss in my duty here, however, if I did not emphasize that inactivity is not going to work if we are not careful in choosing the company to invest in.
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Fobz
Introduce me to that charming fellow, will you?
That's fobzy, 4 u, making more by doing less, unlike my blog which is an aberrance. It's making zilch by doing too much.
Glad to see my little playmate Louie here too.