Investing, investment or investor. These are easy words anyone can say. Entering to the investment world and taking successful investment decisions are of course a time taking, complex puzzle. Sufficient knowledge on investment is not alone a success factor but, knowledge on the right point is the real success factor. Like any other process or job, you should agree that an Art and Science involved to investments too. Right knowledge on both could help you to crack the puzzle easily. Here is my article, exposing the art and science of investing with an intention to gives you best possible answers to two most important questions before making any investments. This article structured such a way to make you comfortable by knowing the Art and Science of investing in a right measure and sense at the end of reading this!
I have no plan to send you back with free hands after reading this article. Instead, I will give a bonus, two fantastic reference resources. When you joining it together, you will get a deadly combination! It will provide you all required knowledge in the Art and Science of Investing!
The Art of Investing
So what is the art of investing? Through knowing the art and science of investing we are finding answers to two most important questions. “Where to invest” and “When to invest”? In this section we are getting knowledge on the first question, where to invest. Once after completing to read this section, you will be able to find answers to this question:
1. Where you are going to invest?2. How do you find a good investing candidate?3. What make a difference when invest on this candidate?Art of investing section give you full idea to find a good investing candidate. When looking on a business to invest, identify what exactly that business does. Is that business able to survive any kind of economical situations like down turn recessions etc? If yes, what make it survive any such difficult situations? Is any product or service from the company having ultimate position in the market without any competitors? Is there any space available in the future for its competitors to enter and beat this company? How popular its product or service among people regardless anywhere in the nation? Once company stopped, what would be the possible source for public or is there no source available?As a beginning, you could identify and create a list of companies those providing ‘unique’ services or products with no competitor base or very few small competitors. To do such, you have to take care on each product and services available in the market along with its influence to public, to identify real monopolistic businesses from various sectors. Such companies should not have a commodity type business where lots of competitors exist. Also, they should be their own decision makers on the price side of their service or product and people should buy it because of not having any such products in the nations.Do lots of researches, interviews with people along with your own study. You would find number of right companies that presently not visible to you. Get a list and move to the next section, the Science of Investing!
The Science of Investing
In the above section we have identifies number of companies as the suitable investment candidates. Is that enough to start your investing? No. Because, identifying companies not giving you the best chance of investing until you know the answer to our second important question – “When to invest”
Science of investing is NOT simple as art of investing. If you are so smart, you can complete the art of investing action within days and create a wonderful list of excellent companies. But, whether you are smart or dumb, Science of investing required through study and research on various factors to identify the best time to invest on any business you have found in the above section. Science of investing intend to understand the real value of the company and identify the right time to buy its stocks.To understand value, we have to use various fundamental analysis methods like ROC, ROE, Owner Earning, Dividend History and number of others. To identify the right price an investor should well aware of the buying price safety range. This article not intends to give any such information than provide you a best idea to the Art and Science on investing. I am sure you have got the right idea what I meant.Now, you may have a major doubt in your mind, how would you done it if you are not an experienced investor. I have a perfect, killer answer for you. I know you will have this doubt and that is the reason I have informed you earlier that I am going to provide a deadly combination resource set.
Resource to lean Art and Science of Investing
In this section, I am providing you two wonderful guides for your continuous reference. Ensure you have read it again and again until you are well comfortable with what authors meant through these resources. Also remember to read both of this guides. One of it completely dedicated to the art of investing and other is to science. In this context, reading any of this book never give you better understanding of the subject.
1. Common Stocks and Uncommon Profit by Philip Fisher. This is known as the superior guide in the sense of giving all the required knowledge about art of investing. Without reading this guide, a value investor never comes as a real value investor. Read it. It has explained the art of investing through all possible angles. Go to Amazon and Buy it instantly.
2. The Intelligent Investor by Benjamin Graham – No doubt, this is the only Bible for Value investors. Moreover telling the good side of a business to buy, it is pointed its major areas to analyze when that stock would get in a right price. Of course is a classic resource to learn the science of investing. Again go to Amazon to buy it instantly.
As I said earlier, when ‘Common Stocks and Uncommon Profits’ joins its hands with ‘Intelligent Investor’, it automatically convert as the most powerful, Deadly Combination for investors. This is your time to decide and go further.
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