The Six Mistakes of Man

According to Marcus Cicero, a prominent philosopher who lived at the time the Romans began to lose their domainance as a civilization has this to share.

Here are what he thought were “The six mistakes of Man”

1. The delusion that personal gain is made by crushing others. - it perhaps gives us a feeling of insecurity and destroys the very foundation of our thought.
2. The tendency to worry about things that cannot be changed or corrected. - Don’t worry about the things you can fix, and don’t worry about the things you can’t fix. Worrying is a losing strategy…
3. Insisting that a thing is impossible because we cannot accomplish it.
4. Refusing to set aside trivial preferences.
5. Neglecting development and refinement of the mind, and not acquiring the habit of reading and studying.
6. Attempting to compel others to believe and live as we do.

The mistake Warren Buffett never makes

By Jackie Cameron

One basic error sets Omaha sage Warren Buffett apart from most investors - he never confuses price with value.

That was one of the many insights from Robert P Miles, best-selling author and Warren Buffett expert, on the CNBC Africa Power Lunch with Moneyweb on Monday.

Miles was speaking to Moneyweb host Alec Hogg, who has met Buffett and was among a small group of international journalists allowed to ask him questions at his Berkshire Hathaway annual general meeting in the United States earlier this year.

Buffett is known for shying away from the media and analysts.

The author, in South Africa to present at a value investor conference, told Hogg that he has been to a power lunch with Buffett twice and to Buffett's office a couple of times.

"He's very funny. He could be a stand-up comic," said Miles of Buffett's down-to-earth way of imparting advice to others.

Buffett has bought a Miles' book for his directors and has also mentioned one of Miles' books in his letter to shareholders, the Buffett-expert said, which is the equivalent of Oprah endorsing a book in the financial world.

Highlighting some of the lessons other investors can learn from the way Buffett sizes up companies when deciding whether to buy, Miles said: "Ninety-five percent of investors are investing on price and confuse price with value.

"Warren Buffett likes to play a game with himself. He likes to figure out what something is worth first, then he looks at the price."

If the price is a significant discount, then Buffett is a potential buyer. "Unfortunately most investors confuse price with value. Warren Buffett has made lots of mistakes - but not that mistake," said Miles.

Buffett is well-read, and likes to play bridge over the internet with his friends as well as surfing for information generally.

One of his best friends is bridge partner Bill Gates, yet Buffett has said he does not know Microsoft well enough to invest in it.

Miles clarified this position, saying that if Buffett "can't go out ten years and see where it will be", he can't discount to today.

Buffett says it is "important to know what you know and ignore all that you don't know". He "doesn't understand where computers will be in the next ten years", said Miles.

The investment sage from Omaha knows investors who have "made millions of dollars" owning just five or six different stocks "so it is not necessary for you to know about lots of different stocks outside your knowledge base", said Miles.

Of the many CEOs interviewed by Miles for a book on the Warren Buffett CEO, all were independently wealthy - to the tune of around US$100m each.

They all have free rein over their businesses, with Buffett attracting managers who "forget they've sold their businesses", as well as Buffett "forgetting" he has bought.

"His job is to recognise the Tiger Woods of the world, if golf were a business, and the last thing he'd want to do is tell Tiger how to play golf," said Miles.

Also of importance to Buffett when he buys a business are: earnings - they currently need to be in the region of at least a net annual US$75m; a high return on equity; little to no debt; that they are throwing off cash, not requiring it; are simple businesses; and he needs to know the price.

Buffett, Hogg discovered earlier this year, would love to make a big deal in South Africa.

Source: Moneyweb

Four Rules for Investing in Asian Stock Markets

By Tony Sagami

My Four Rules for Investing in Asia

1. Buy-hold-and-pray won't work . For the last four years, even dart-throwing monkeys made money investing in China. Going forward, I think investors will need to be more nimble. Don't hesitate to take profits after large moves, and use defensive strategies like protective stop losses to manage risk.

Just last week, for example, I instructed my Asia Stock Alert subscribers to move up their stop losses on Siliconware Precision Industries and MEMC Electronic Materials. I think those two companies have extremely bright futures, but we've doubled our money in only nine months! It only makes sense to protect our profits.

2. Don't ignore more focused investments like ADRs. Exchange-traded funds have exploded in popularity, and they're an excellent way to get a diversified stake in specific countries or regions. However, don't shy away from great individual companies, either. Some wonderful firms make it especially easy for U.S. investors by listing American Depositary Receipts (ADRs) on our exchanges.

3. Pick the right sectors and industries. In my opinion, one of the keys to profiting from the Asian growth miracle is concentrating on the right areas. For a full description of my top three investment areas, read " My Favorite Ways to Invest in Asia ."

4. Don't get stuck in just one country. While China's stocks have bounced like a super ball, many other Asian markets are still on sale. And as I mentioned earlier, a lot of them have spectacular growth prospects.

In fact, I've already booked my next trip to Asia to visit some of these countries in person. Every trip I've made to Asia has led to great gains down the road, and I think this one will be just as rewarding. Stay tuned!

Best wishes,

Tony Sagami

Source: Marketoracle

What Is Obvious Is Often Wrong In The Stock Market

What Is Obvious Is Often Wrong In The Stock Market

Beginners need to be extremely careful of how they filter news. On any day, if you listen to CNBC, you will hear people with strong beliefs that the market is about to go in a certain direction. They might be right, but if the majority of commentators are saying that things are about to fall apart, it could mean that things are ready to turn up.

In The Stock Market, What Is Obvious Is Often Wrong - By Jeanette Szwec

If you are considering trading stocks to make extra money, there are certain things you need to understand about market dynamics and market sentiment. Everything logical and sensible is often wrong. As a former professional stock trader, I learned a lot of "tips" that aren't shared with the general population. Here are a few tips that the professionals know.

If you are just getting started with the stock market, you need to be very cautious about things that seem logical, but aren’t true. As an example, you may hear about a company that is about to introduce some really exciting product - could be a new MP3 player or a drug - just any product that is really being hyped in a publicity campaign. The "logical" thought is to buy the stock just as it is being introduced. But that "logical" choice could be a very bad one.

The market often responds by “buying on anticipation of news, but selling on the actual news.” There is even a common phrase of “buy the rumor, sell the news.” The beginner who expects the news to bring good results will be punished severely. The market has its own rules of behavior, and they often don’t follow our logical beliefs.

Most likely, the stock of the company that is introducing the new, exciting product has already risen in value. The hype pushed the price up "in anticipation" of the product introduction. As soon as the product is actually introduced, the people who bought early are likely to cash out, letting the stock price drop as soon as the product is actually introduced.

Another example of this is “trader’s sentiment.” This is just a fancy term for “what do people think is going to happen to the market in the future?” When the sentiment gets very bullish, there is a great likelihood that the market will start tumbling. When the sentiment gets very bearish, there is a great likelihood that the market is ready to turn back up. Although this seems illogical, there is some underlying logic to it. When most people are very bullish, there is a good chance that they already bought stock. As more and more people are bullish, there is a good chance that these “bulls” have become fully invested and there are fewer people out there with cash in their pockets, ready to invest. Consequently, there are fewer buyers on the sidelines, and this can lead to the market turning down.

This means that beginners need to be extremely careful of how they filter news. One any day, if you listen to CNBC, you will hear people with strong beliefs that the market is about to go in a certain direction. They might be right, but if the majority of commentators are saying that things are about to fall apart, it could mean that things are ready to turn up. The best indicator of market direction is this: if most professional stock commentators are saying the market is going up, that is the best indicator that the market is ready to go down! So listen to analysts' predictions but consider that the opposite is more likely to occur.

Is this confusing? You bet it is! That is why a beginner needs to spend a lot of time observing, learning to detect these patterns, understanding sentiment analysis, and developing a list of indicators they can use to determine whether the market is more likely to move up or down. With the market, news is often expected and the effect of the news is already factored into the market pricing, so when the news is finalized, prices start to drop since there is no more anticipation of good news. The anticipation causes the price to rise. The actual news brings the end to anticipation.

Watch. Observe patterns. Never assume that things that seem logical will be true. Be an observer, not a believer. Have very few beliefs of what you think will happen. Spend more time observing what is actually happening.

Source: sap-basis-abap.com