Thursday, June 29, 2006

Day 5 : Love Investing

It began with the reminiscence of the past, I was reminded of how I used to feel for the ladies I was either infatuated by or liked. It all seemed that time after time I fell for women who had their hearts taken, their dreams already shared and their love held by another’s hand.

It’s like investments. The girls I go after dare not risk letting go of what they are already holding on to. Risk aversion plays a determinable role in their selection. I have no one to blame for the circumstance for if I were in their part I wouldn’t say I’d do it. Girls being the investors, and guys being the stocks, would provide for a better understanding.

In this light, investors having to own their stocks would preferably maintain their current ‘value’ stock, which pays out dividends and provides for greater returns. ‘Growth stocks’ (i.e. me that is) would defer from those attributes of the value stocks. As growth stocks are generally new to the market, they do not provide for the dividends and payouts. Investors who often see growth stocks are reluctant, with one thing in mind; the possibility for future earnings. Maintaining a stock in the current market is already hard enough, what more to say to discard the stock completely and jump into something new altogether.

However, growth stocks do provide also for future earnings. Not anytime in the near future, but one cannot be certain of how a growth stock might perform in current market conditions. Unsystematic risks often outside the control of investors would be playing a major role in ensuring the performance of a stock. This is an area which could eventually souse an investor in losses.

On the other end of the spectrum, growth stocks, if given the proper maintenance and right investments along with a proper diversified portfolio could perform beyond the expectations of investors. Remarkably too I must concur.

When all this is drawn down, it comes down to how credible an IPO can be, and how risk averse an investor is. As risks escalates so does the returns. The concept is applicable to the IPO’s as well for when an IPO is carefully drawn out and provides for the ramifications an investor might require, ambiguity is removed. Maintenance of the investor-company (the company which made the initial IPO) relationship is vital. There will always be someone who losses and someone who wins in every situation. Tolerance and patience determines how successful both investor and stock will be.

And when all this comes to love investing, the ideal ingredient is love itself.

Listen to this:
1) Rooster – Deep and Meaningless
2) Lou Barlow – Legendary
3) Staind – Right Here
4) Ben Jelen – Come On
5) Bernard Fanning – Shelter For My Soul

Stay beautiful Kuching. Live every dream.

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