Hello All, I am writing this post because even if it helps one person it was worth it. I purchased my first share of stock in 2005. I then became a daytrader for many years (until about 2014). I kept thinking that one day it will all click. I figured if I never quit, I would one day be successful. I tried price action, indicators, combinations of both, time and sales, etc. ad nauseam. However, eventually I quit, I had lost tens of thousands of dollars and had no backup plan or skills to build a new career upon. Unfortunately for me, I had no finance professionals around me to guide me. I wasted years of my life chasing short-term trading in hopes of one day finding a profitable system. I blamed my discipline. I blamed my trading system. I fooled myself into thinking that I was getting closer, that I all I had to do was work harder, and the profits would pile up soon enough. Now here is where the story gets interesting. In 2015 I discovered value investing. I spent some time learning about fundamental analysis, something I spent no time learning back in my trading days. It all started to click. If a share of stock is just a partial ownership in a business, why would some squiggly lines on a chart tell me if the business would be more valuable in the future. If you were to buy a local coffee shop, would you somehow try to use TA to buy it? Heck no, you would research competition, talk to customers, talk to the employees, etc.. You would see how much the business earned over the last five or ten years, and try to pay a fair price to earn a satisfactory return on investment. Once this light bulb went off, I then spent a lot of time reading everything Warren Buffett wrote and the writings of other successful value investors. I started to learn how to actually value a business using a discounted cash flow approach. Since then, I have yet to have a single losing year. It doesn't mean they can't happen, they will, I will possibly have many over my career, but the long-term scorecard will be satisfactory. I am now managing money professionally for friends and family. I just wish I could have seen the light earlier, instead of wasting so much time, energy, and money chasing short-term speculation. Anyways, I figured I would write this post and share my story. If it helps even one person become more successful and happy, it was well worth it.
i think most people who discovered any type of investing in the middle of a bull run would feel like they found the IT factor. So, let me ask you, what does your value analysis say what hte fair value of CRSR is? i just want to see the technique at work
Value investing could still stagnate during sideway market. You need to have different strategies that work for different regimes. Sideway markets happens more than trending markets in market history.
good for you mister. I don't think you have wasted your time day trading. We have to try various things. Then we will know what is best suited for us. What works for one person may not work for another and vice versa.
Trouble with value investing / pure fundamentals type approach, most often the stock price returns are mediocre, every now and again something might be a standout success, but others in your portfolio will be laggards. I spent years on the biased fundamental routine trading side, the best returns for me come from a smattering of fundamentals, along with TA, but sorta unconventional TA. (Homebrew TA). I found alot of my success comes from eliminating stocks, look to dump from watchlist in preference than adding to watchlist, ie begin with a wide universe then cull it to the bone like, eg eliminate 90% of all doubtfuls.
I thought you said you made 1000000000% on some Indian bank. Why do you need lunch money? Unless of course, you didn't make 100000000%.
Thanks for sharing... Not saying Value investing is the grail,but for 99 percent of the people,investing for the long term is the way to go.If you have a day job and can somehow put 50k per into the market,assuming 8-12 percent returns,you will have 2.5 mil to 4 mil in 20 years..I can assure you that is far greater than almost every "technician" on the board. As for technical analysis,read up on Michael Burry and see how he applies it.
The assumption of 8-12% lends well more to index funds. Implementing a discretionary value strategy probably will vary widely across value investors. Not everyone is a Warren buffet. Even so he has underperformed in recent years. 8-12% assumption on a single ctry index could also be a hit and miss. Lost decades are widely prevalent . Case in point, Japan in 1990s, US in 2000s. Even from where I come from - Singapore, our broad mkt index has never recovered since 2008. Even if you manage to fulfill the 8-12% returns in indexes, the path to the end in 20 years could be zigging and zagging. Not anyone could stomach 30-50% drawdowns along the way. And you can avoid it with slightly more active systematic strategies. Just don't place too much faith in a single asset class, geography or strategy. Always diversify.