There are 2 Parts To The Investment Equation. Marry Them And You Can Achieve Amazing Returns!

Good” Investment Opportunities Are A Dime A Dozen.  “Great” Investment Opportunities Are Worth Their Weight In Gold!

I’m talking about those rare opportunities when the risk is truly low and the reward is fabulously HIGH.

Finding these diamonds buried within thousands of stocks, which make up “the market”, is a full-time job.

Identification and due diligence is of monumental importance.  I can’t understate that.  But stock selection is merely the first part of the investment equation.

There are 2 Parts To The Investment Equation.

Part 2 requires even more serious thought and consideration.

This is the portfolio management side of the equation.

Now there are decisions to make.  To act or not to act?  What percentage of total assets should be allocated here?  What percentage of assets should be allocated there?  When should the winners be allowed to run?  When should the losers be cut quick?  And on and on…

This is the point in time where people can become emotional with their investments, or not.

Buying immediately could be warranted, but buying immediately after identifying a stock and doing due diligence should be more of the exception than the rule. After making a yes decision on making the investment, accumulating your position will often take months, or more.  The entire process of identification, due diligence, and acquisition can even take years in some cases.

Here’s the good news – there’s normally no rush.  Great businesses are like fine wines and whiskey, they take time to mature and they almost always become more valuable with age (be it months or years).  Which is awesome from our perspective because time’s now on our side!  Time is working for us, rather than against us!

Point being, next time you feel a sense of urgency to buy or sell one of your stocks (for whatever reason), push the pause button mentally.  Take a step back.  Take your eyes off the ticker screen or the horrible chat rooms, and place yourself in a different environment.  Go wherever you have to go, do whatever you have to do to get into a mental state that enables you to make rational business/investment decisions.  Too frequently, people make irrational decisions based on price action and price action alone, or how they’re feeling that day, or something they read on the billboards.  Weather patterns can even influence people’s behavior, statistics prove it!

Learn from irrational people – just make sure you don’t allow yourself to become that irrational investor.

Making a habit out of placing irrational/emotional buy and sell orders will be hazardous to your success.

Often times, staying patient (not buying or selling) is the right decision.

Self-discipline is absolutely critical!

Patience and self-discipline, as they relate to money management, are necessary skills many investment gurus forget to teach.  Patience and self-discipline aren’t focal points of what’s taught in the Universities either.  But they should be!  Patience and self-discipline are two of the most important investment skills a money manager can have!

Assuming said money manager seeks long-term success and subscribes to a stock picking strategy geared toward buying quality resource and non-resource related businesses below their intrinsic market value and growth potential.  A strategy akin to what Ben Graham taught Warren Buffett decades ago.

In Summary: We’re All Participating In BullMarketRun.com To Achieve Market Trouncing Returns Through Unbeatable Technical & Fundamental Analysis Of Niche Sectors!

Over annual and multi-year periods, market trouncing returns are attainable for all of us because we’re working hard to identify “great” investment opportunities.  The ones that are worth their weight in Gold.  We won’t settle for “good” dime a dozen ideas.  But never forget, identification and due diligence is merely half the equation!

World class Warren Buffett-like 15% to 20% compounded annual gains really are possible, but not if your investment decisions are habitually driven by emotion. Patience and self-discipline are absolutely critical.  They’re the other half of the equation.  Successfully marrying the two is what leads to financial freedom and generational wealth.

Ultimately, many of you will monitor your portfolio daily and weekly.  Just remember those fluctuations normally have little, if anything, to do with the underlying intrinsic value and growth potential of the resource and non-resource related business you’re part-owner of (whether you own 1,000 shares or 10,000,000 shares).  Removing all emotion from the investing process is nearly impossible, since we’re all human, but we do want to be conscious of our emotions.  I’ve found that my emotions can actually be a great contrary indicator of what actions I should and shouldn’t be taking.

Going forward, consider keeping a trading/investing diary.  It could become invaluable for tracking your mental state and reflecting on your decisions, both right and wrong, along the way.

One or two of you might be expecting some “hot tips” from me following the conference?  I have to tell you though, “What happens in Vegas stays in Vegas for now.” We’ll be in the due diligence process for weeks and months to come on several new stocks identified at the conference.  Bottom line, I left feeling fairly confident a diamond or two was buried in there somewhere.

My reasons for attending the MicroCap Showcase were twofold:

Based on those expectations the conference was an absolute success!

At the end of the day, all of us benefit and stand to gain more as BMR’s network of influence broadens.  New investors and new subscribers leads to increased liquidity in our favorite stocks.  And increased liquidity often precedes higher prices.

Of course, a higher stock price can open all types of new doors for a public company (i.e., they can use their greatly appreciated currency to make acquisitions and fund growth plans).

Not unlike the minerals exploration community, the community of micro cap investors is rather small.  So it’s important to shake hands and spend quality time getting to know the who’s who in micro cap finance.  Possibly, quite possibly, a few of those people I met at the conference might be establishing the great investment deals of tomorrow.  If they aren’t already involved with a deal BMR wouldn’t want to miss out on today.