Friday, 14 December 2012
Value Investing: Keep Emotions Out of It
The wisdom shared is about avoiding emotional attachments to stocks and the businesses they represent.
If you LOVE Dutch Lady# , don't invest in it until you like the numbers. And if the numbers look good and you invest, but they start to look bad later, be able to recognize that.
Value investors continuously look for the good and the bad and keep their RATIONAL wits about them as they decide to buy and keep their investments. The purpose of an investment is to achieve a greater financial goal and not to become a "member of the family".
DON'T HESITATE TO ADMIT YOUR MISTAKES. Value investors admit their mistakes and learn from them. They take the time to understand what changed (or was overlooked in the first place), and they move on.
They have a RATIONAL "sell" model and aren't afraid to sell a business when underlying reasons to own it have changed or if the price is way out of line with value.
# Dutch Lady is a stock in the KLSE.