Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
and-hold investor anyway, not a trader. “I watch the market and
listen to TV business shows because it’s both enlightening and entertaining,”
he says. “I know how to keep it in perspective and not react
irrationally to the developments of the moment. Most people don’t,
so they would be better off leaving their TVs off. The truly successful
investors I’ve watched or worked with over the years are those who
know how to sit on their assets. They get themselves into several good
positions and aren’t shaken out just because the market has a weak
season.”
Stovall also points to Warren Buffett as a great example. He’s built
his multibillion-dollar stock market fortune by ignoring the indexes
and focusing on individual company selection instead. In fact, there’s
a good chance Buffett rarely tunes in to CNBC, CNN, or any other
financial news station. Buffett has long espoused the belief that you
should purchase shares of stock in a business the same way you would
if you were buying the entire company, thus taking out the worry of
what “the market” will do. “It makes great sense,” Stovall insists. “If
you time the market, you might not want to buy shares of XYZ now,
even though you feel it is a good value, simply because, let’s say,
your work indicates this will be a lousy year for stocks because of
the strong dollar overseas. However, would that be a factor in your
decision-making process if you were buying the entire company?
Would the strong-dollar worry be any more relevant? Probably not.
I once heard Buffett on a television show say it makes no difference
to him whether 100 other security analysts agree or disagree with his
opinion about a company. The only thing that counts is a company’s
ability to generate earnings from the assets employed in the business.
Short-term fluctuations in the price of a company’s stock are meaningless
to him. The price of a stock on a given day is only what others
think the company is worth.”
Elizabeth Bramwell agrees. While she doesn’t invest based on the
overall market, she does pay attention to it. She follows the progress
of the major indexes and her individual holdings throughout the day
on her computer, keeping an eye out for possible trading opportunities.
“The computer can be very distracting,” she admits. “But on the other
hand, look at all the information I can get from it.” What’s more, with
the explosion of online information, Bramwell notes that investors
today must be prepared to make instantaneous decisions.
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