The Path To Financial Freedom
I love my job and thrive working, but one day it dawned on me, that I would be working until I was 70 years old. And the next thought was that I have a lot of dreams about what I want to do when I retire – when I have time. Like travelling and focusing on my hobbies, spending time with loved ones. But when I retire, I might not have the health that my dreams require – maybe I do, but the risk of not being vigorous is there. And that is why I’m not only investing but studying daily and focusing on my investment cases and teaching others how to invest with confidence. The reason I started the blog is because I’m so passionate about sharing this strategy which I know works, with everyone who wants to listen and is interested in their future.
I’ve been investing since 2005 and for many years I had no idea - like so many other people - about what investing really was. Or that there was a difference between speculating, trading, and investing. And I tried to find information about investing strategies: I went to seminars and courses, listened to radio shows (and later podcasts) about investing, read books. All these activities made me believe that investing was about predicting what a stock would do in the future – and what would be trendy and which sectors would be growing in the years to come.
But predicting a trend or the future is actually not the strategy of the most successful investor of all time, Warren Buffett. He has two rules: Rule 1: Don’t lose money and Rule 2: don’t forget Rule 1! So, I thought: should I follow advice from less successful investors or from the most successful investor of all time? Easy answer.
With value investing we’re not trying to guess which sectors or companies will be trendy in the future. Instead, we stay within an industry we know. If you’re a journalist you might want to focus on communication companies, if you love hiking there might be certain equipment you enjoy using, and if you prefer to eat organic food maybe there’s a producer, a restaurant or grocery store that you like.
Most people in the stock market are looking for the next trend, but not us because Warren Buffett’s rule number one is to not lose money – we look at what could be risky.
If we look at the car industry for example – they’re going through disruption these years. We see experiments with fuel (hydrogen and electric) and companies developing self-driving cars and we see that in some countries it’s cheaper to hire an Uber (or similar) rather than buying a car. So, this industry will be disrupted within the next couple of years and that’s a risk. We want to stay clear of this industry until it has gone through the change.
As a value investor we invest in businesses we want to own forever. This is unlike other trading strategies, where some might use technical indicators and others just buy a stock and wait, hope and pray it will go up and then panic-sell at a time where either the market is up or down with no set strategy. I’ve been there so I’m no better than anyone. But today I have a set strategy, and I’m so grateful to be sharing it with you.
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