Friday, 20 November 2015

Be Greedy When Others Are Fearful

"Be fearful when others are greedy, and be greedy when others are fearful."  These were words spoken by Warren Buffett at the height of the 2008 Financial Crisis.  I mentioned this phrase a lot when I blogged about the emotion-less and contrarian "Investor Mindset" a few years back.  Nowadays, I seem to have to remind myself about it a lot more.

In recent weeks, I have been slowly buying stocks at their lows but of course, one knows that they can go lower.  When my portfolio takes a beating or I feel unsure about whether to buy more, Warren Buffett's words again helped me get through those times.

As I slowly accumulate stocks, I realize too that investing can be such a lonely activity.  You and you alone are fully responsible for your decisions.  I may discuss with my husband and he gives me his full support. But, when I press the "order" button - buying stocks in a day which are a few times his monthly salary - I cannot help but feel the heavy burden of responsibility.  

How do I convince myself?  I look at the financials and ratios - little debt, consistent yields, great management, transparency, working business model, low price to net asset.  Of course, every company is hit sometime or other by cyclical movements in interest rates, global economy and commodity prices.  If the company's business model is not unduly threatened, my aim is to ride through those cycles.  

I also deliberately read less financial news because you would just hear a lot of doom and gloom stories.  This is the time to catch up on non-time-sensitive reading.  I am even thinking of doing some window-shopping (which is not something that I do regularly) to gauge for myself what the general retail sentiment is like as I am vested in retail REITs as well.  

What I need next, I think, is patience. And time.

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