Investing principles

My architect said that he cannot understand why doctors do not want to pay for architectural expertise when buying their biggest investment. Instead they use 'lesser' (read "cheaper") minnows in the building industries, like draughtsmen and builders. Same thing for financial investments. But there is a difference. The architect concentrates on your project for that period of time. The financial advisers look after many portfolios. And they cannot monitor the portfolio as sharply. And the big firms do not look at small companies.

Hence, this week I quit Morgan Stanley Smith Barney. My own portfolio has outperfomed the bloc which was given to the big firm to look after at 1.5% commission.

When a big firm makes a decision to buy or sell, it has to do major research work. This takes time yet decision sometimes has to be made quickly when an announcement is made on the ASX. My assessment is simple and quick.

People will often buy a share, see it falls and condemn it to the drawer. Yet, if it has good value/management/prospect, then one should top it up! Patience is still a virtue in investment.

Sometimes, there is a gamble. Nearology, historical mining, seismic study, gravtity scanning, trenching, rock sampling and other anomaly surveys can all suggest possibility of success. But it is not necessarily accurate. There is also unanticipated geological or political problems. And company board can manipulate data and inside information can disadvantage the unsuspecting investors.

I have been buying when share prices collapse with good announcements or no announcement. And buying when that commodity price is stable or rising. Hence, I have been able to do better than most. Yes, even more than as a doctor recently but share investment does not provide as much stability.