Sunday, 3 November 2013

Invest the way you'd like to live .

As per title referred to an article in " The Sunday Times " Nov 3 , 2013 invest section by Senior Correspondent , Goh Eng Yeow .

A summary of observations about human nature - how it can change the way we live our lives , and for that , how we invest matter made by Clayten Christensen ( a best-selling writer whose works have profound impact on how big United  States  companies like Intel run their business.)For instance , we unconsciously allocate resources that offer us immediate gratification .

A fine example noted by Mr Christensen would be on how we put in enormous efforts into our careers , offers the most concrete evidence through steady rank progress. In contrast , fewer and fewer people are spending time and energy with their spouses and children  because nurturing such relationships fails to give the same sense of immediate satisfaction .

Through this , it may very well apply to how we invest our money . Many numerous professionals claimed themselves to be serious investors , yet in the next minute , they might be asking  " Got any good stock to buy anot ? Any inside information ? " ( How many of you did it ? I admit i do .)

Many people would have think that the stock market as a venue to make a quick buck and condone any small lapses  without realising the later consequences that could befall them .

Mr Christensen said " A voice in our head would say as a general rule , most people shouldn't do this . But in this particular extenuating circumstance, just this one , it is OK . The marginal cost of doing something wrong 'just this once ' seems alluringly low. It suckers you in and you don't ever look at where that path ultimately is headed and at the full costs that the choice entails."

His observation reflects on temptation to chase after loss-making penny stocks when we see our friends making big bucks while we watch like fools from sidelines wishing that we had joined in the fun as well.
Despite knowing the fact that we will violate the original objective to exercise prudence in growing our nest egg.

Thus when crash comes , penny stocks bubble bursts and we blamed the media and authorities for not doing more to stop our greed slaughtering.

The lesson learnt : " Keep your eye on long term rather than be tempted to make a quick buck "

Mr Christensen faces up to cancer and the possibility that his life might end sooner than planned.