Hello Sir, my name is Teguh
Hidayat, I am a stock investor from Indonesia. Can I have your time for just a
minute? I would ask some questions which I am sure you have the answer.
Hello too, Teguh. Okay, what do you want to know?
Well, first, what is your
main advice to be a successful investor?
Here is my advice. Rule number one, never lose money. Rule number two, don’t forget rule number one. I never spend time
to think about how much profit I would get, just don’t lose.
And about not to losing money in the market, then it’s all about risk.
And risk comes from not knowing what you’re doing, or in this case, not knowing
about the stock you want to buy. Stocks, or shares, are not mere pieces of
paper. They represent part ownership
of a business or company. So, when contemplating an investment,
think like a prospective owner. And by that I mean, before you decide to buy
stocks, first you have to learn about the company. Never invest in a company you do not understand.
You said you never think about the profit. Are you
sure?
Yes. I never attempt to
make money on the stock market. I buy on the assumption that the authorities could close the market the
next day and not reopen it for five years.
But how you could do that? Buy a stock and see the
results in the next five years? Most of people cannot hold his stock even just
for a day!
That’s because I don't look to jump over 7-foot bars.
I look around for 1-foot bars that I can step over. Most people always expect that if they are buying a stock, then in the next day
the stock would soar
5% or more. While me, I understand enough that consistent profit in the long
run is far better than big profit in short time. If you’re trying to
jump every day, then sometime you may fall on the ground. But if
you just step over and keep walking, then it is always easier to do.
What
is the difference between investor and speculator?
If you are an
investor, you are looking on what the company is going to do. If you are a speculator,
you are commonly focusing on what the price of the stock is going to do.
So
how if we want to become investor?
Our game is
focus on the asset, or the company, not the price of the stocks. I suggest you
to play the same game.
What
would you do if the stock market is bearish?
We’ll buy more
stocks, haha.. I know this is not easy
for you, but that’s what we’re doing. We simply attempt to be fearful when
others are greedy, and to be greedy only when others are fearful.
Being
greedy when the others are fearful? How?
Well, why would
I feel fear when there are so many cheap and good stocks we could buy? Once
again, I don’t see the price, I see the value of the company. And when the
price is fair enough, then it is the time to spend the cash.
So,
you sell your stock when the market is bullish?
Not really. I’m picking good stocks at good times and
staying with them as long as they remain good companies. So I only sell them
when they’re turned bad. But our point is, we also sell our stocks, but only when
it is no longer ideal for investment.
All right lemme review again.. Don't think about profit, just don't lose, learn the company not the stock, don't jump but just keep walking, be greedy when the others are fearful.. And how's the result Sir?
Well, I've made my first billion US Dollar in the early 90's, about twenty three years ago, and it become around 40 billion US Dollar right now. Not bad, eh?
Not bad? It's marvelous! Anyway Sir, thank you very much for the conversation. It’s been a minute and I
know you’re very busy, so I would say goodbye, hope we can see you again in the
future!
NB:
My special thanks for any sources who provide the images. The above
conversation is fiction, but the words are based on real quotes by Warren
Buffett.
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