Wednesday, April 25, 2012

Data drives action

So what do you do with your research and due diligence...


EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

Its certainly a fine balancing act.  On one hand you have to do enough research to get a good feel and a good confidence level of what you are analyzing and researching. On the other there will be a point where you have to stop and just accept the results as what they are. Not taking action is a completely valid conclusion. The important thing is that you move on to the next thing.

Why is this so important for us to keep in mind? There are thousands of companies out there. Each with years or decades of earning reports and investor meetings. Each with hundreds of articles of other bloggers and investors ideas on them. If we focus for one for too long we could never get to a better one to select.
Trading is similar in that you have dozens of forex markets, dozens more futures commodity markets. Multiple time frames and hundreds of tools. Hundreds of different traders out there sharing their strategy. By the time you are done researching, your trade is over and you get to start again.

How does one find the right balance? Its going to be different for each of us and you just got to jump in and start your analysis. I do not think its a static amount of research for the same person. Some companies I have found it very easy to analyze correctly (long term profitability for my portfolio). Others took a long time before I hit a point I could trust my findings.


Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

1 comment:

  1. I really like that quote "data drives action, and if you don't take action then your data is useless."

    Great post here PMU, I like to evaluate companies at different angles to form a 'gut reaction' and I react on that. In the field that I'm in, over-analysis will ruin you and nothing will get done! I use the same philosophy on my stock investments.

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