Short Term Trading Weekend Lounge: 15-17 Feb, page-6

Hi @sci9249

My approach to the market is slowly changing all of the time. The gyrations of the market don't tend to influence what I personally do.... I can lose money in a rising market just as easily as I can in a falling one. I have been in the market now for about 15 years and I reckon only in the last year or so have I begun to have any real clue about what I am doing.

I am not too shabby at money management and that helps but when I consistently make bad decisions it only serves to keep me in the game. I am 99% FA inclined... but my history of being too trusting... and too optimistic... and too impressed with my own abilities has been a problem. I like the spec end of the market because it represents the future, however, it has been a series of hard lessons. Finding and then understanding a company with genuine prospects is not even half of the battle. The bigger thing is to understand the risks.

I am drifting away from buying into a company's story at the beginning. My experience is showing me that establishing a reliable revenue stream is the first hurdle for many young companies and they mostly fail to achieve it. Blue sky is a wonderful thing but it is the province of investors with very deep pockets who can afford to take those sorts of chances.

My attention has firmly moved on to companies which either have positive cash flow or on the verge of it. These are still companies which do not get the attention of professional analysts, so they can be under-priced. Over the years I have rung lots of companies and spoken to managements... they can be sincere and honest, but that doesn't prevent them from being sincerely and honestly wrong. I am done with that... these days it is "show me the money" and I can see the numbers in the quarterly statements. It means buying into a company at a later stage, after all of the early gains have been made, but that is a better fit for the sort of risk I can reasonably expose myself to.

As far as the current market is concerned, I remain deeply... deeply... sceptical. IMO... we are witnessing a slow moving train wreck. The contradiction is... despite that I am profoundly optimistic.