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June 20, 2006

Buy when others are selling and sell when others are buying

In order to really make money in the markets, you have to be both right and different from everyone else. If you buy Google because you believe they are going to be the next Microsoft, you may be right, but you won’t get much return on your investment because everyone else thinks the same thing and it has already been priced into the stock. In order to make money, you have to be right and different.

 

If you look at the very few people who have ever made their fortunes in the financial markets - men like George Soros, Jimmy Rodgers or Sir John Templeton - this is exactly how they did it. They bought when everyone else was selling and sold when everyone else was buying. They did not follow the herd. They followed their own path. But what made them successful was not only being contrarian but also being right.

 

Sir John Templeton, for example, correctly figured out when Hong Kong reverted to Chinese control that it wouldn’t be the economic disaster everyone else was predicting. As all the big multi-nationals sold off their holdings in Hong Kong, at fire sale prices, he bought them up. When everyone else came to the same realization he had much earlier, he sold them back at highly inflated prices.

 

What does this example teach us? Those that succeed - financially and in life - are those that have the confidence to think for themselves and act independently. Success is almost always found in that hidden area where most people do not have the courage to go.

 

Few are those who see with their own eyes and feel with their own hearts. ~Albert Einstein

 

As always, you thoughts and comments are not only welcome but appreciated. You can share them below.

 

SOURCES:

 

1. BrainyQuote. "Albert Einstein Quotes,"

http://www.brainyquote.com/quotes/authors/a/albert_einstein.html

 

Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.

 

Posted by Kim Snider on June 20, 2006 | Permalink

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» http://www.a1qualitystocks.com/Blog/24/24/ from How to Pick Stocks Like a Pro
Most people have what I call a sheep mentallity. They wont do something unless everyone else is doing the same thing. This usually means that most of the profit, if not all of it, has already gone. It takes nerve to step out and go against the c... [Read More]

Tracked on June 21, 2006 at 05:30 AM

» Perception from Myke's Weblog
Few are those who see with their own eyes and feel with their own hearts. Albert Einstein via Kim [Read More]

Tracked on June 21, 2006 at 07:11 AM

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