Investing

            Recently, I am reading a book about investment. There is a lot of knowledge about investment that I can gain by reading this book. 

            To be a good investor firstly you have to differentiate between an inventor and a speculator. An investor often takes a long term view that sees the market price of a company that grows and matches the true worth of the company. In addition, value investors have the self-discipline and patience to see to the whole investment process to achieve their financial goals.

            However, a speculator takes short term view because it does not really consider the fundamentals of financial instrument. The change in market price is not sustained if it is not supported by its fundamentals in the long run.

            A true investors need to understand that stocks are also called “securities” for a reason. As Mr. Benjamin Graham said, each security represented a real company and that company had a value, just like a house would have an appropriate value. This factor can differentiate between a value investor and a speculator. A value investor looks at a company’s value whereas a speculator looks at the market price.

            Moreover, value investor uses the fundamental analysis which involves qualitative and quantitative studies when do the valuation of a company. Other than that, a value investor is making fact based and informed decision on an investment he knows well. Thus, he can minimize his risk by getting a better picture of the company.

            In conclusion, to be a good investor one should avoid the thing that a speculator have done and start follow the good attitude of the investor.