Has value investing changed you?

[arriyana]

I was an active trader for about 4 years and made a decent amount of profit. But every day, I sleep with great worry and consistenly checking the share prices because of my trades. Because there are no rationale for a trade, merely a gut feel or a technical trend that could go either way, I was always on my toes.

Since I moved over to value investing, it had helped to reduce the fear by a great deal because I know I have a reason for investing in a particular share with a margin of safety. (Recommend reading Benjamin Graham Intelligent Investor. It's a great book). I function much better daily with value investing.

So which method yields higher returns for you over say a period of 4 years? Active trading or value investing?

This is quite a difficult question to answer.

Even as value investing, you don't escape the erratic movements of the market. As Walter Schoss (he is one of a legendary value investor) put it, 70-80% of his gains are made in 10% of the time invested. Stocks tend to jump or plunged quickly. Technically if you are an active trader and catch that 10% of the movement, you can make a lot more returns than value investors. But the question is, can you really catch that small slice of the action time?

[Breadman25]

yup. Sometimes when I talk to friends, all eyes big big when hear about investing. But when telling them that you need to do alot of background research and study, all roll eyes.
I think somehow, people relate equities to big money, bull run, excitement, rush... but when it is not what they expect, they think you must be doing something wrong.

This happened to my friends too. So nowadays, if anyone dont agree on value investing, I dont talk about shares with them.

Personally, value investing changes me abit. I now saves more money. As i want to be able to invest during a crisis/correction. And i think i am also getting more "cheapo". Everything i buy, I will look for undervalue items. But I do splurge once awhile.

[ashparagon]

For me, I really look at price more differently now. When buying things and also making decisions, I am also less impulsive. I guess it's a good thing. Haha. I even think about the purchases I made and question if I overpaid for them, and what kind of value I get. Even for small purchases! =x

[thereserved]

I was an active trader for about 4 years and made a decent amount of profit. But every day, I sleep with great worry and consistenly checking the share prices because of my trades. Because there are no rationale for a trade, merely a gut feel or a technical trend that could go either way, I was always on my toes.

Since I moved over to value investing, it had helped to reduce the fear by a great deal because I know I have a reason for investing in a particular share with a margin of safety. (Recommend reading Benjamin Graham Intelligent Investor. It's a great book). I function much better daily with value investing.

Wow 4 years as a trader, I can barely live thru it for a month. Going to sleep with things bothering me ain't good for the soul!


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