Armin's Stock Selection

and same stocks on board the Astra portfolio going into SLO II, which started some six months ago. It has been designed to be a quality fund including stocks with good return on investment, diversified, low turnover and almost buy and hold strategy following some rules, first, referring to asset allocation as it's diversification strategy that works. It doesn't offer a guarantee against short-term market losses, but it's an effective investment risk-management tool. Sector concentration, no matter how attractive the sector appears, no matter how compelling the arguments, is still speculation, second, not ussing short-term criteria to judge long-term results. That can lead you to unknowingly creating a very high-risk portfolio. Ultimately, consistency is more important than an occasional "home run." and third, I believe that market timing doesn't work. Moving in and out of markets based on any anticipated changes in price as opposed to fundamental changes in value is speculation -- not investing. And a final note: Investing your serious money requires discipline, patience, objectivity and a clear, documented investment policy.
We still don't know how big all the loan losses will be or how long they will go on. We don't know what the Federal Reserve will do at its meeting or emergency meeting, this week or later this year. We don't know what the next round of economic growth figures will bring, or the trend in unemployment, but it appears that volatility is one thing that seems predictable in today's stock market. Market moves more sudden and unpredictable due to unexpected economic shock like gigantic losses at banks because of irresponsible subprime loans.
Excellent reading comes from Pierre Cutler blog : Fear and panic selling! Fear and panic selling! That's all I heard last week on CNN, NPR, MSNBC, CNBC, etc. Since October, the Dow Jones Industrial Average has fallen 16.2% from its high of 14,279.96. And the past few days, oh my! The world is about to end! So say the market pundits.... And my point? The recent decline should not worry the long term investor? Why? It's simple. Long term, the market always makes investors money.

Anyways, what's a recipe?How should we behave going forward* Being "New Buffett or very close to that what he seeks and says: Picking the right person to hire on the investment side will not be easy, "We need someone genetically programmed," he specifies, "to avoid serious risks, including those never before encountered." Other talents he will be looking for, he says, are "independent thinking, emotional stability, and a keen understanding of both human and institutional behavior."
Again it's not that easy at all.
Have a tranquil investing and good luck!

Comments: View Comments |  Tuesday January 29, 2008