Luck versus Investing. Luck plays a part in every investor's life.

Value investing certainly requires a bit of luck, but it is mostly based on perseverance and discipline.  Since you will be taking some risk as you pick beaten-down companies, you do need the luck that most of these risks will pay off.  You also need the discipline to stick with your choice, knowing it will eventually pay off even if things don't look good immediately.  And, yes, some of those risks won't pay off.

Luck plays a part in every investor's life, but few credit their success to being lucky.  So don't count on luck to get you where you want to go.

Discipline is the key to the door of success for value investors.  You have to know how to set your investing goals and stick to them.  You must have the ability to develop your own road map to success without having to worry about taking directions from others.   You also need to become an accumulator of wealth and have the discipline to not spend as much as you make, so you have money to invest when you find a good bargain.




Remember, disciplined people are not easily side-tracked.  They:

• set their sights on a series of lofty goals,
• figure out strategies for meeting those goals, and 
• have the discipline to not lose sight of those goals, even if they stumble and fall along the way.  

They get up, fix the problems, and continue to stay focused on their ultimate goals.

Handling Mistakes and Bad Luck

Everyone makes mistakes, and bad luck strikes everywhere.

There is not much you can do about bad luck except to diversify and shy away from huge risks.

When you do make mistakes, take the time to ponder them and find ways to avoid making the same ones again.

Telling an old story

The last 2 years, before the onset of this severe bear market, the following stocks of mine were taken private: Maxis, MOX, VADS, ICP.

These were viewed with some annoyance then, as they were carefully selected stocks for the long term.

Maxis and MOX were privatised before the downturn started. During the downturn, VADS share price was well supported near to the privatisation offer price.

On the other hand, each ICP was exchanged for 30c cash and 0.6 shares of IJM priced at 5.80. Even before the privatisation, the price of IJM went down significantly. Fortunately, the price of IJM subsequently rebounded back to around $5.80 recently and those who held onto the IJM shares obtained through the privatisation of their ICP shares were able to cash out at close to the original offer.

In retrospect, the privatisation of these good companies by the major shareholders, probably saved the minority shareholders from short-term losses, as these shares would definitely have gone down lower with the overall bear market.

Sometimes, we are saved or rewarded by the swings of the market. :-)