A2M $3 Party, page-952

Sorry to hear about that but I think there is such a thing as following the market too closely. Don't get me wrong its a great feeling when you have a winner and it goes up day by day but it's a rare occurrence. But the rest of the time stock prices go up and down pointlessly, you find yourself questioning why trying to understand every move when really there is no reason. It's a waste of energy and its stressful and to be honest I don't understand how anyone that concerned with share prices can sleep at night seemingly having no idea of what could happen to their money the following day.

I mean step back and read the last sentence you wrote... The price of oil is recovering so perhaps a stock that sells baby formula will go up.

At the end of the day I have found the most effective method of investing is to buy high quality businesses at reasonable prices based on the following relatively simple assertions:
1. Stock prices follow earnings/company value
2. High quality businesses are able to generate sustainable earnings growth and create value.
3. Thus buying high quality businesses results in increasing share prices over time.

I don't claim to know when the share price will go up but evidence suggests that it will follow the value of the underlying business. Twice a year I will read the reports lodged with the ASX and listen to managements commentary to determine if my underlying thesis remains in tact and if so I will continue to hold and collect my dividend. It's not difficult to identify high quality businesses but the hard part is being patient enough to wait to buy them at a reasonable price so that future growth is not already priced in.

This method also tends to be the least emotionally taxing and time consuming (I still have my full time job where most days I will work 10-12 hours). I am someone who can suffer from anxiety/stress at times this approach helps me remain calm during times of volatility and my justification is perfectly rational. The businesses I have invested in have minimal exposure to economic growth or commodity prices or most factors that are outside of the control. Thus I am confident the company's I invest in are able to increase their earnings year after year.

I do not believe anyone who tells you they can predict the price of a share or trade buy buying low and selling high and consistently making profits from these trades. If you need further evidence the title of this thread is "A2M $3 party". This was created when the share price was on a tear towards $3 and here we are back at $1.63. Furthermore anyone who can do that would no longer be trading they would be comfortably retired in their mansion or travelling the world. I have yet to come across any multi-billionaires on hotcopper.

All the best & please DYOR, this post is not intended as investment advice.