Taming the Money Sharks by Professor Philip S Cheng – I cannot find a better phrase to describe this book other than taking this from its back cover – “Down-to-earth strategies guaranteed to make you “shark-proof’ while optimizing your investment returns. There are lots of book out there offering sure-fire formulas, fool-proof systems and impossible-to-lose schemes for making that big swoop in the market. In spite of that, this book stand out from the rest. It is written by a top investment professional with both academic and practical experience in stocks investing, with no interest other than to give retail investors like us a chance to achieve our financial goals over time through prudent stock investing. Some mantras, of course, can be applied universally for other investment vehicles, like property investment. Professor Philip has distilled a lifetime’s experience into a set of 8 simple rules that will assist you to steer clear of potential investing hazards and money sharks (aka the Big Boys institutional investors, in case you are wondering).
A preview of 4 of the investing maxims highlighted in this book – illustrated!
Hot stock tips for average investors could originates from investors with deep pockets, so that could end up with even deeper pockets. Of course, not every large investors is like that, but that can be done if they want to. Fund managers have their jobs to do according to the fund mandate, and when macroeconomic or company conditions change; buying and selling large amount of stocks is their day job, normally dwarfing the order size of retail investors. Retail investors often chase prices in the dark. Thinking of beating the market? Think again. So what to do to prevent this from happening?
Investing involves risks, like juggling a few balls in the air. Would you rather not juggle any balls at all (that sounds wrong!)? Not investing is a risk by itself – inflation risk. If we, as human, do not take calculative risks, we won’t be having man powered flight today (quote from Triumph in the Skies 2). So how to minimize the probability of losing money due to systematic risks? (The author explained them in length).
To mitigate the risks beyond our control, we could summarize our portfolio strategy in one diagram as above. It is not a guaratee of short term profit, but like life itself, there will be wins and loses. Predictably and step by step, you will have more systematic wins than occasional losses. Now, What would you like to call this analogy of portfolio management?
The last piece of maxim the author stressed is to not lose any sleep over investment matter. According to him, if one’s investment is properly structured, they increase in value even when you sleep. What good is our money if we cannot enjoy it with good health? Worse yet, with millions to your name, you may live a long live but in a wheelchair with tubes connected all over.
2 Copies to be given away by publisher Wiley – The Best Answers to the 3 questions in bold above, chosen by the Publisher, Wins