Netwit, the sleep factor in investment strategy is totally crucial. If weeks like this one freak you out, and cause you to bail at precisely the wrong time, you need to rethink your entire strategy.
You must define, in as much detail as possible, your time horizons in any investment you make. If you buy Softbank, or any other stock, with the intention of holding for (x) days/weeks/months/years, you really should stick to that gameplan, unless something untoward happens that will radically affect that investment. That could be a lot of things, like demonstrated madness at the helm, head-in-the-sand moves by management that you fundamentally disagree with, and lots of other factors.
But don't be spooked by a market crash, ever. The best investment advice I've ever received was: Crashes are your friend. They allow you to pick up, often at huge discounts, shares of companies you believe in. A kind of psychological madness takes over for very brief periods. It is as predictable as rain. This philosophy has served me exceedingly well. I typically only buy several times a year. I was a big buyer on Wednesday, and a huge buyer on Thursday. Had it kept going today, I would have been a monster buyer. All picked up from people who freak. I always keep a large chunk of cash ready for crashes. Don't be a panic seller, ever.
This is of course easy to say, and very difficult to do. You can't time the market--it's been proven time and again that it simply doesn't work--but you *can*, often once a year and sometimes more than once, hold open a big trash bag into which panicked people will scramble to dump their shares. This is how real wealth is created, and is the source of market-thrashing returns.
Now, you obviously have to choose your companies VERY carefully with this kind of approach. I like to imagine that I'm limited in my investing lifetime to purchasing only about 10-15 companies, total. Kinda like entering into a marriage of sorts. You do a whole lotta work before you marry them.
I disagree with the people who chant, mantra-like, "never fall in love with a stock." I've got some serious passion for my Softbank, my Cisco, my EMC, my Qualcomm, my Dell, my Intel, and my Berkshire. I add to all of those everytime the market hands me a big discount, like this week. And I'm getting seriously infatuated with my JDS Uniphase, my Satyam Infoway. I've got puppy love going for Korea Thrunet and Exodus.
You've got to know and understand your companies' businesses and management. The more you know, the better your chances of investment success.
Just one humble opinion, since you asked.
Yamakita |
