WG wrote:
"How "time and patience" has paid off for NVO. 47:16 to 49:40"
These days, investors are bombarded with different styles, motives, and techniques applied towards making money in the equity markets. Many people must be confused on how to engage in market investing. So, I figured I would share my view on the matter. Especially with how one chooses to view Novo in the grand scheme of things.
I would like to highlight the 5 main types of investing.
The first 4 types of investing are focused on trying to make money and “grow your wealth” within a rigged and corrupted system, where everything is a basically a lie or premeditated fraud. Most of us dwell in this world of the 4 types. Investors have little choice because this is the System in which our equity markets exist. It may be a hopelessly lawless casino, but investors try their best to come out with something positive in the end.
The 5
th type of investing (Business Participation) is uniquely different. It goes well beyond “value investing” and into the realm of endurance and wealth preservation. It is much more that simply “value investing”.
Here is a brief Summary of the first 4 investment types, of which most are familiar:
- Medium to Long Term Investing:
Investors intend to be medium to long-term owners of the companies in which they purchase shares. Having selected a company with desirable products or services, efficient production and delivery systems, and an astute management team, they expect to profit as the company grows revenues and profits in the future. In other words, their goal is to buy the greatest future earnings stream for the lowest possible price.
- Short Term Speculation:
According to Philip Carret, author of “The Art of Speculation” in 1930 and founder of one of the first mutual funds in the United States, speculation is the “purchase or sale of securities or commodities in expectation of profiting by fluctuation in their prices.” Carret combined the fundamental analysis popularized by Benjamin Graham with the concepts used by early tape readers such as Jesse Livermore to identify general market price trends.
- Trading:
A trader is someone who buys and sells securities within a short time period, often holding a position less than a single trading day. Effectively, he or she is a speculator on steroids, constantly looking for price volatility that will enable a quick profit and the ability to move on to the next opportunity. Unlike a speculator who attempts to forecast future prices, traders focus on existing trends – with the aim of making a small profit before the trend ends. Speculators go to the train depot and board trains before they embark; traders rush down the concourse looking for a train that is moving – the faster, the better – and hop on, hoping for a good ride.
- Index or Mutual Fund Investing
Frustrated by inconsistent returns and the time requirements to effectively implement either a fundamentalist or speculator strategy, many securities buyers turned to professional portfolio management through mutual funds. According to the Investment Company Institute’s Profile of Mutual Fund Shareholders, 2015, almost 91 million individuals owned one or more mutual funds by mid-2015, representing one-fifth of households’ financial assets. Unfortunately, very few fund managers can consistently beat the Market Indices over extended periods of time.
Therefore, it is not surprising that exchange traded funds (ETFs) emerged with the issue of the S&P 500 Depository Receipt (called the “SPIDER” for short). Similar to the passive index funds, ETFs track various security and commodity indexes, but trade on an exchange like a common stock. At the end of 2014, the ICI reported that there were 382 index funds with total assets of $2.1 trillion.
The 5
th and final Investment type is unique in its focus because it targets the endurance of a business that is external (not exposed) to the antics of our financialized world. This investment philosophy IS NOT for investors that are trying to get rich. This IS for investors that are already rich, and want to preserve and pass on their wealth to their future generations.
- Business Participation
The focus is on scarcity and endurance within the investment portfolio, and the stewardship of what is irreplaceable capital. This type of investing is OUTSIDE the system and its longevity and resilience is not dependent of the fraudulent activities of the current financial system. The main idea is to participate in a business endeavor that grows an investor’s savings. This is extremely unique (and rare).
If you have 2.5 hours to spare, I strongly urge you to listen to Grant Williams interviewing Tony Deden. Deden exemplifies this investment style. The perspective is absolutely fascinating, and in many ways highlights how business investment should be conducted.
https://www.youtube.com/watch?v=a4_U6bS-cU4
The reason why I bring these investment styles up as a topic of conversation is because they all apply to this specific investment in Novo Resources. Personally, I lean more towards the styles of 1. and 5., which is represents my perspective on this investment:
1. Long Term Investor
5. Business Participation.
That is why I show much less interest towards investor opinions that focus on trading or short-term speculation.
Tx