Investors
expect to take full benefit of UPSIDE of the
stock market and protect their investments from
its DOWNSIDE. Is it a genuine expectation
or just a fantasy?
We tested the genuineness of this expectation
by analyzing the following investment actions
of world’s most successful investor Warren
Buffet. (Source: How to pick stock like Warrant
Buffett – By Timothy Vick): -
Action 1: Selling
out before the early 1970s Bear Market:
“Beginning in 1968, Buffett began to express
sincere worries over stock prices. Writing near
the peak of the go-go market of the 1960s, Buffet
seemed to sense imminent danger to investors.
Unable to find enough quality stocks at reasonable
prices, he folded his investment partnership
in 1969, acknowledging that his form of diligent,
research intensive stock picking couldn’t
compete in a momentum –fed short term
oriented market……………………….
Buffett liquidated clients’ accounts,
put most of his personal wealth into Berkshire
Hathaway stock, and stayed mostly out of the
money-management business for almost 5 years.
He stayed on the sidelines while Americans experienced
the most brutal bear market since the crash
of 1929 to 1933”.
Action 2: Going
long in 1974:
“……………………………At
the bottom in 1974, few investors could be coaxed
to re-enter the arena. But Buffett, refreshed
from a 5 year hiatus and sitting on a plenty
of cash, dove headlong into the same stocks
the market could no longer tolerate. Like a
boy in candy store, Buffett found more values
than he could possible digest. An investor who
plunged into the market at the 1974 low made
a 74% return within 2 years”.
Action 3: Avoiding
the 1987 Crash:
“…………………………….At
the Berkshire Hathaway annual meetings in 1986,
Buffett Lamented that he could not find suitable
companies trading at low prices. Rather than
dilute his portfolio with short term stock investments,
and given the fact that Buffett’s stock
holdings had already provided him tens of millions
of dollars in gains, Buffett opted to
take profits and shrink his portfolio.
‘I still can’t find any bargains
in today’s market’ he told shareholders.
We don’t currently own any equity
to speak of……………...
Five months after telling shareholders
of his dilemma, the stock market lost 30% within
a matter of days”.
The analysis of the above
actions prove that it is possible to take full
benefit of UPSIDE of the STOCK
MARKET and protect the portfolio from
its DOWNSIDE.
Investors’
expectation is, without doubt, genuine.
The only pertinent question is how one can turn
it into reality. We have done some 8 years of
dedicated research on this aspect and are now
in possession of the required knowledge and
the technique to do it successfully. Read our
both the research books:
- “Right Attitude to High
Altitude-A 3D concept to win stock market”
and
- “Awaken Your Investing
Wisdom”
And empower
yourself with this knowledge and technique.
