"As last year’s Berkshire Hathaway shareholder meeting, Warren Buffett said he has owned 400 to 500 stocks during his career, and made most of his money on 10 of them. This is common: a large portion of investing success often comes from a tiny proportion of investments."
If we flipped enough stones, we might eventually learn to identify the 'touch gem'.
If we hold long enough to the 'touch gems', they may eventually become our investing success! (That's when we say it follows Pareto's principle.)
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| If only the touch gem will glow like this |
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Try to learn as many investing mistakes as possible vicariously through others. Other people have made every mistake in the book. You can learn more from studying the investing failures than the investing greats.
Success is a lousy teacher,” Bill Gates once said. “It seduces smart people into thinking they can’t lose.”
It's better to learn from other's mistakes than other's successes.
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“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.” ― Jesse Livermore
There is a misconception that putting on a trader's hat means we must buy and sell all the time. Traders know how to hop onto trade opportunities at the right time and not be a sitting duck.
Trading is not just an action, it's a skill of identifying the right opportunities to buy / sell.
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Ma Yun's speech video 馬雲與青年有約:
What made me so captivated by Ma Yun's speech is that he's got a casual, humorous charisma when delivering serious concepts. His words often resonate and provoke deeper thinking after you laughed about it. The speech portion in this video ended at about 35-min point, the later part is a Q&A session with a few young entrepreneurs.
This is the most memorable phrase for me in the speech.
“风来的时候猪都会飞。风过去以后摔死的还是猪。”
It translates to "When wind comes, even pigs can fly. But when the wind stops, the pigs all fell to death." Feng (wind) here refers to opportunity.
What are the different type of "pigs" he described?
1. The ones that saw an opportunity but didn't make the change to oneself needed to take on the opportunity.
2. The "real pigs" who didn't even see the opportunity that just brushed past.
3. Lastly, the ones who took the opportunity but made a disaster out of it.
More doses of quotes from Ma Yun which I have translated from Chinese to English:
"Paradigm shift in future businesses from B-to-C to C-to-B business model. In C-to-B model, the quantity ordered will be smaller, requirement will be tougher, personalisation will be stronger." (B=business, C=consumer)
"We change ourselves and change the future."
"To chase a dream, you need a team. And they must have the perseverance to chase it with you despite sacrifices."
And guess what is Ma Yun's idea of a perfect team?
Go listen to the last 2 minutes of the video. It's pretty hilarious and so Ma Yun-style.
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