Don’t be greedy, Between Investment and speculation, they are totally different
There is a time when we really sad because we was trapped with our wrong “Investment”. It’s only because we never learn about what the real meaning of investment. Based on Benjamin Graham (Warren Buffet’s lecture) Opinion, What is investment??
“an operation which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative“.
Based on Benjamin’s explanation, there 3 important element for starting our investment.
1. Do some Analitycal Research
What does it mean?? It means we must do some research before starting our investment. not just from opinion. Make you understand about your investment before you execute your project.
2. Try to protect our capital.
Our first capital is like a tree in our park or garden. If someone steal their fruit, next time there would be a chance to still get a their fruit. If someone cut their branch, although it’s disturbing our organization, but we still have our capital and our capital still have a talent for growth. But how about if suddenly our tree crushing down??
Need to be warned, all kind of investment must be have a risk, even we buy US Treasury bonds, it still has a risks. If there is investment without a risk, just leave it. Because it’s only a fake investment who want to eat our money.
3. We must try to get Reasonable Profit not “Incredible profit”
One of the main rule which we never forget, no matter what kind of investment or speculation is just about “return proportionate to risk”. Higher profit, higher risk. In the reality there isn’t High profit low risk investment. If there is a person come and offering you a high profit low risk investment, why he/she didn’t do it using theirself??
Our main problem, there are many people didn’t know about this concept, they think that they are investor, but in the other hand they just speculator, or worst case, they are scam’s victim.
In this case, not all speculation were bad. Like Benjamin Graham said to us :
“Just as there is intelligent investing, there’s also intelligent speculation. But there are many ways in which speculation may be unintelligent. Of these, the foremost are : (1) speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack the proper knowledge and skill for it”; and (3) risking more money in speculation than you can afford to lose”
It just simple article about investing. have a nice investing.
