Thursday, March 01, 2007

My Investing Strategy

With all the market ups and downs this week my phone and INBOX have been busier than usual. I promised a few people I would revisit my investing strategies again so here goes.

I don't have an NASD license so I hesitate to teach investing in my classes. My broker/analyst friends continually bug me to take all those tests and get to work for their clients.
New York City 8670
I've shared some of my insights on this blog in the past:
How To Invest Or Buy Anything

Day Trader Do Your Homework

Even those thoughts really do not completely express my investing strategy. My grandfather (Chief Engineer at Cadillac Buick Oldsmobile for many years) held stocks throughout his life and did very well. I inherited nothing from him but the knowledge that putting your hard-earned money to work in equities leads to a comfortable retirement.

I get out in the world and talk to people that make the economy move. I let people call me at all hours from all over the world and pick my brain. I swear my clients call me to help them streamline some business process but really just want to ask me about good international investments.

People in India contribute a boatload to my knowledge base, in return I encourage people to consider their economy. Love the action on the BSE/SENSEX, many beautiful minds at work there. Get to India every couple of years to ride the trains and brains from Mumbai to Kolkatta to Chennai. I wait for invitations rather than go it alone to Asia but I like to surprise my friends in the UK/EU.

I keep, let's see, four screens running here in my office, telling me all about business and world news. I don't subscribe to cable TV. I teach and learn from others every weekday, even those funny GOOG discussion groups get factored into the mix. I am not a day-trader, never buy stocks on credit, and rarely sell holdings that are less than a year old. I read most of the 8K, 10K, and 10Q reports and listen to Quarterly conference calls.

The unique thing I suspect sets me apart from many individual investors is that I have been taught not to panic. Living in Haiti and getting shot at a few times there and other places taught me to keep my head down and stay cool. When the stock markets go wildly up and down I sit back and watch. Then I buy just slightly past the lowest point the next day or week. How do I know that will be the lowest point? Historical trends, an accurate stock ticker, and intuition developed from decades of market watching. If I within a buck of the lowest point on $50 shares heading to $80 I consider myself as having nailed it.

Do I ever lose money on investments? Sort of. I never sell losers unless I need the write-off for tax purposes. I buy in smaller increments than the big boys but usually sell the entire position when it is time to sell. I save like the Japanese and like to be as punctual as the Germans. My biggest losses have occurred because I was forbidden to sell when I wanted to, stock option rules slammed me. I no longer work as a full-time employee at corporations, just consult, we all get along better that way!

Some people suggest I am using insider information but I never buy shares in my client's firms while I am under contract to them. I look around and see what equipment and services people are actually buying. So much money has been going into China and India I look to see where that money is being spent. China is spending millions in South America and Africa, especially in natural resources. So I invest in South America and Emerging Markets. India often invests in itself, in America, and in the EU. Basic infrastructure improvements to roads, trains, and airports are revolutionizing India and China.

I use funds only when I cannot buy the underlying equities myself. I like T. Rowe Price managers but Blackstone and others have attracted my attention and money. I am not invited to the Venture Capital party but that does not mean I cannot peek in the window to see what's going on at Carlyle or Blackstone. The London Financial Times does a great job covering VC and international markets. The Wall Street Journal is always a day late on the key stories, in my opinion.

That's about all I can say without getting the NASD knocking on my door...

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