The cost benefit of self-directed value investment

Quote:There is a folktale said Edison failed a 1000 times before invent a light bulb. He said the effort is not wasted because he get to know the 1000 ways of not making a light bulb.

From Albert Einstein:
Insanity: doing the same thing over and over again and expecting different results.

Yes. Provided you rethink your approach and realise what is wrong and improve on it.
You see, some people have been buying 4D and toto for many years and losing money weekly. But, every week, without fail, they will queue up at the Singapore Pool.

If the probability is against you, the right way is to walk away.

(15-05-2014, 05:51 PM)yeokiwi Wrote:

Quote:There is a folktale said Edison failed a 1000 times before invent a light bulb. He said the effort is not wasted because he get to know the 1000 ways of not making a light bulb.

From Albert Einstein:
Insanity: doing the same thing over and over again and expecting different results.

Yes. Provided you rethink your approach and realise what is wrong and improve on it.
You see, some people have been buying 4D and toto for many years and losing money weekly. But, every week, without fail, they will queue up at the Singapore Pool.

If the probability is against you, the right way is to walk away.

The folktale of Edison and his light bulb is true - Just a folktale only.
Don't believe go and google. In other words it's just an exaggeration.

Just like go and try and google about WB lost > 19% of his portfolio in 1999 when S&P 500 gained >19%. IIRC.
Don't believe go and google.
But this time it's very difficult to find why WB lost money.

^^ 1999 Berkshire was slight up while market was up 21%, worst relative return ever but it didn't lose money. Dot com was roaring to the stratosphere while brick and mortars were expected to disappear in next decade

The quote by Edison seemed more or less correct:
http://quoteinvestigator.com/2012/07/31/...t-results/

Agree with yeokiwi that the difference between Edison and a nut case/ fanatic/ mule is progressive improvement, learning from mistakes. Everyday learn something new is a day earned

(15-05-2014, 05:51 PM)yeokiwi Wrote:

Quote:There is a folktale said Edison failed a 1000 times before invent a light bulb. He said the effort is not wasted because he get to know the 1000 ways of not making a light bulb.

From Albert Einstein:
Insanity: doing the same thing over and over again and expecting different results.

Yes. Provided you rethink your approach and realise what is wrong and improve on it.
You see, some people have been buying 4D and toto for many years and losing money weekly. But, every week, without fail, they will queue up at the Singapore Pool.

If the probability is against you, the right way is to walk away.

(16-05-2014, 12:21 AM)specuvestor Wrote: The quote by Edison seemed more or less correct:
http://quoteinvestigator.com/2012/07/31/...t-results/

Agree with yeokiwi that the difference between Edison and a nut case/ fanatic/ mule is progressive improvement, learning from mistakes. Everyday learn something new is a day earned

(15-05-2014, 05:51 PM)yeokiwi Wrote:

Quote:There is a folktale said Edison failed a 1000 times before invent a light bulb. He said the effort is not wasted because he get to know the 1000 ways of not making a light bulb.

From Albert Einstein:
Insanity: doing the same thing over and over again and expecting different results.

Yes. Provided you rethink your approach and realise what is wrong and improve on it.
You see, some people have been buying 4D and toto for many years and losing money weekly. But, every week, without fail, they will queue up at the Singapore Pool.

If the probability is against you, the right way is to walk away.

Thomas Edison was a trial and error guy: "I Have Gotten a Lot of Results! I Know Several Thousand Things That Won’t Work"

Nikolai Tesla was a knowledge guy and said of Edison: "If he had a needle to find in a haystack he would not stop to reason where it was most likely to be, but would proceed at once, with the feverish diligence of a bee, to examine straw after straw until he found the object of his search. ... I was almost a sorry witness of such doings, knowing that a little theory and calculation would have saved him ninety per cent of his labor."

Albert Einstein?
"imagination is more important than knowledge."

WB lost > 19% while S & P 500 gained >19%. (i forget in which year)
i have read it in a book from NLB. i think the author is PAUL MERRIMAN.
It must be on record if not nobody dares to say it in his book, right?
Usually i would have copied the passage because it is something unusual to me.
But when i try to google for when WB lost money, i can't find it .

(16-05-2014, 12:21 AM)specuvestor Wrote: ^^ 1999 Berkshire was slight up while market was up 21%, worst relative return ever but it didn't lose money. Dot com was roaring to the stratosphere while brick and mortars were expected to disappear in next decade

The quote by Edison seemed more or less correct:
http://quoteinvestigator.com/2012/07/31/...t-results/

Agree with yeokiwi that the difference between Edison and a nut case/ fanatic/ mule is progressive improvement, learning from mistakes. Everyday learn something new is a day earned

(15-05-2014, 05:51 PM)yeokiwi Wrote:

Quote:There is a folktale said Edison failed a 1000 times before invent a light bulb. He said the effort is not wasted because he get to know the 1000 ways of not making a light bulb.

From Albert Einstein:
Insanity: doing the same thing over and over again and expecting different results.

Yes. Provided you rethink your approach and realise what is wrong and improve on it.
You see, some people have been buying 4D and toto for many years and losing money weekly. But, every week, without fail, they will queue up at the Singapore Pool.

If the probability is against you, the right way is to walk away.

Thanks fat al for the interesting quotes. Edison had the stubbornness and persistence that is at times exhibited by Steve Jobs as well.

Knowledge may be important but sometimes it is the grind and learning through failure and going up the learning curve that sometimes separates the best from the rest. IIRC tesla in his later years wanted to make an electrical weapon to lighting strike enemies. 走火入魔

Temperament actually u just need to check Berkshire AR

(16-05-2014, 08:36 AM)specuvestor Wrote: Thanks fat al for the interesting quotes. Edison had the stubbornness and persistence that is at times exhibited by Steve Jobs as well.

Knowledge may be important but sometimes it is the grind and learning through failure and going up the learning curve that sometimes separates the best from the rest. IIRC tesla in his later years wanted to make an electrical weapon to lighting strike enemies. 走火入魔

Temperament actually u just need to check Berkshire AR

O. K.
But the, what somebody wrote in his book about WB if it is not true, then what?

^^ depends whether it is worth your effort to defend the record Buffett has the credibility capital

It is not so black and white like Singapore also. People entitled to their opinion as long not blatantly wrong. The author probably did some adjustments to the numbers himself to come to this conclusion. But end of day I would assume Buffett's 10 year CAGR is better than the author' seven with this "exception"

(15-05-2014, 01:16 AM)liphuang Wrote: Forget about the daily price, only review quarterly result, don't listen any news about China property or federal reserve or economic forecast, don't care about any tips given.

You need to spend huge effort at the beginning to learn how to select good under-value companies, after that you only need to wait...... So 100 hours is actually more than enough.

Generally I agree with you on the concept but not the approach. For me, I try to absorb as much news as possible. I pay attention to local/world economic development especially to China's economy. I follow up on what the Fed is doing, and what they are expected to do next. I read up on research reports issued by brokers. However, it is important to be able to decipher these information, separate them into good/bad information and store the good ones into memory and discard the bad ones. There is absolutely no need to react to every piece of information, neither it is wise to go against the current.

I fully agree with you that huge effort in the beginning is needed to select good companies, and after that just wait, but don't wait blindly. There is no sure things.

(16-05-2014, 08:36 AM)specuvestor Wrote: Thanks fat al for the interesting quotes. Edison had the stubbornness and persistence that is at times exhibited by Steve Jobs as well.

Knowledge may be important but sometimes it is the grind and learning through failure and going up the learning curve that sometimes separates the best from the rest. IIRC tesla in his later years wanted to make an electrical weapon to lighting strike enemies. 走火入魔

Hi Specuvestor,

Just to clarify - I was not trying to demean Edison.

I highlighted the 3 quotes as it resonates my investment journey.

1) Starting out with trial & error trying to find the magic formula - trend investing, brokers' tips, technical analysis, daytrading, following big money, news and insiders etc.

2) Acquiring necessary technical knowledge (accounting, valuation, DCF, business models) to the extent that the investment process is no longer trial and error but a quick calculated decision. Eureka!

3) Unfortunately, knowledge is of the past and you need imagination to foresee business potential, changing business environments, underlying risks or potential pitfalls that is not captured in historical financial statements.

Tesla is likely much more intelligent than Edison but to reach his stage of doing "quick calculation", akin to Warren Buffett's simple calculator, he like anyone else (Buffett, Einstein etc) had to undergo the initial trials and perseverance of learning. I would agree with you that the Edison spirit of perseverance remains important throughout because the business and technological environment is continuously changing.