This could potentially generate some interest and discussion in this forum. Care to share the "formula" with us?
First, my thanks goes out to
FIRE'd@51 for throwing me a bone. Thanks! Also thank you to Milton for his comments. Afterall, what difference is it to any of you if I lose my shirt. I'll just be another fly by night quack who thought he had all the answers, right? Judging by many of the comments, it sounds as though many of you (there do appear to be exceptions) are only trying to beat me down because you yourselves have not made it yet....
Anyway, back to real world discussion: Let's talk investing. Rich_in_Tampa questions how sales, internet marketing, real estate, and stock investing are related. I think you are missing the point. You could plug in tour guide, or dog walker, and it wouldn't change the scenario, these are simply means to an end. If the goal truly is Early Retirement, then what difference does it make what vehicle you use? Just like any business system your goals are to buy or produce at a substantial discount (whether it is products, services, real estate, stocks, etc...) and sell at as high a price as possible, retain as much profit as possible, and repeat until rich. This is how Rockefeller, Carnegie, Gates, Buffett, you name it this is how they did it.
Sorry for the long segue, but this leads into my investing philosophy. My approach to investing is based in the realm of fundamental investing, with a technical twist. For those of you familiar with Warren Buffett's approach, you know that he only has two rules: 1) Don't lose money, and 2) Don't forget rule number 1! This is my approach to everything I do. I am not out to make a killing, but if I limit my losses and encourage my gains, chances are I will.
Like Buffett, I first choose businesses that interest me in the real world, not just on paper. This gives me a better insight into the company than just reading a financial statement. I then put the company through a test to see that it truly is a solid performer over the long haul (no overnight success stocks here, sorry). Based on the results of my test, I assign a value to the business based on its hard assets, projected income, etc, and wait for market indicators to tell me when I can buy the business at no more than half of this value. This is what Buffett calls his Margin of Safety (this works for real estate and any other endeavor as well).
I first was introduced to these ideas by Phil Town, who idolizes Warren Buffett. He has a book, and now appears on a show on CNBC. After I heard him speak at a seminar about 3 years ago, I read his book, read several other books about Buffett, and then proceeded to paper trade for about a year, so I could get the hang of it without losing any of my own money. On paper, I would invest $5000-$10000 at a time, and the most I ever lost on a trade was $100, because I wasn't paying attention to market indicators. Over the course of a year, I netted about $1800, which is, of course, an 18% return on the $10000 I had fictitiously set aside for trading. All of this was done investing in companies such as Pepsi, Williams Sonoma, Dell, and Target (I am not necessarily recommending you invest in these stocks). I am now starting to throw my own money into the mix, a little at at time with the ultimate goal, of NOT LOSING MONEY!!!
Sorry to take up so much space. I hope this was insightful. Thanks for reading.
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