Pro and Con

If you follow my blog for a few days now (amid the volatility of IDX – but it’s better today), you’ve already now that my nickname (RevShark) came from the nickname of the author of a book published in 2007 called “Invest Like A Shark”, James “RevShark” DePorre.  You can find glowing reviews for this book in Amazon.com.  But, on the other side, you can also find the counter argument in http://stockbee.blogspot.com/2007/12/invest-like-shark.html.

I myself believe in mind over matter.  It’s like the book “The Secret”, though I don’t read it or watch it’s DVD, just skim some of its pages, but I think I get the idea already.  “Invest Like A Shark” is the book that have attitude.  It may not dwelve deep in the technical analysis, but it provide a good beginning to start thinking about getting more education in the market.  It’s the mindset that matters.  You may have the best technical analysis, but if you don’t have the mindset to win, Mr. Market will chew you up.  On the contrary, mindset without tools is also useless.  But context is always better than the fills.  If I fill myself only financial analysis, without the context of being an investor myself, my analysis will more or less very theoretical without first hand experience.  But if I widen my context, I may get more headache, but I will grow better – financially and emotionally.

I was a fundamental investor by heart.  I read a few books covering Warren Buffett (Buffetology, The Warren Buffet Way, his biography).  I can even say that I know by experience what fundamental analysis (FA) entails and exactly how to value things.  But, the argument presented in the book snapped my beliefs about investment and I started to think about technical analysis (TA).  And guess what? TA framework is much easier than FA because the goal is easier to reach.  FA’s goal is much much loftier than TA.  I don’t think I want to wait five years for a stock that won’t rise ten times its current price and lose the chance to make money weekly and monthly.

And how can I “feel” the market if I trade few and long in-between?  Active trading is constantly testing the waters.  By constantly testing the waters, you’ll know which way to go and which way is no-go.  People with TA is permitted to do swing (short-term) or trend following (longer-term).  People with FA will wait three years to wait for the fruits of their investment – if they put their money in the right one and can only pray when their stocks go down.  People with TA will cut loss immediately.  People with FA will go to the financial abyss if they make a mistake.

Many of traders “forced” to be investors.  Man, it’s like ashamed to admit your own mistakes.  Some will get out fine, but many can’t stand the burden and cut loss at a very high cost.

That’s why staying power is important in any investment, whether it’s stock market or property, not only financially, but also psychologically.