Selective and least efforts 1. celebrate exceptional productivity, rather than raise average efforts for our business 2. look for the short cut for wining, rather than run the full course and losing 3. exercise control over our lives with the least possible effort. 4. be selective, not exhaustive That is about to get the vital few. You are special not because you don't eat but you could know which is vital and put the effort in 1. strive for excellence in few things, rather than good performance in many 2. delegate or outsource as much as possible in our daily lives and be encouraged rather than penalized by tax systems to do the trivial many 3. choose for what we will do with extraordinary care, and if possible employ others rather than being employed ourselves 4. only do the thing we are best at doing, passionately want to do, and enjoy most Do with least efforts with focus We have to have jobs. We could sit idle here or there. Life is valuable since we could do what we enjoy. 1. look beneath the normal texture of life to uncover ironies and oddities 2. in every important sphere such buying a share, work out where 20 per cent of effort can lead to 80 per cent of returns 3. calm down, work less and target a limited number of very valuable things or ideas, where the 80/20 Principle will work for us, rather than pursuing every available opportunity. 4. don't google for data which 80% of market wants, which could not change the fact this 80% lose the money in the market! 5. Strike to get the skills and knowledge to get the most of those few ‘lucky streaks’ in our market life where we are at our creative peak and the stars line up to guarantee success. 5. Get the position where 80% market player will never like to take at the right time. Do the job properly to pick up the winners. That means you have to be right at buying time first! To be selective and to be wise for vital few. Then if you are not extremely unlucky you would be rewarded greatly since you could be one of the 20% of market players, who make the 80% of money in the market! Don't know how to be selective? Go to the life logic for basic first! Behaviors need right rules, principles, and guideline. Something could make us better but we have to do for being alive. Something you have not to do to risk your life. Something is to wear you out, which you have to avoid. Something is valuable but too expensive you could not afford. Something is valuable but sold on fire, which is what you should hold in hand. Something has little probability at most of time to reward you and you don't need to put yourselves in to fight for your luck. Something has value and at the time with unlikely low price in normal time, which is the risk you should carefully take with great protection. Something has great probability at most of time to reward you but now is not popular just because the fads, which needs you to sense the fads and get in when the fads is rebating or better at stop! If you could response to the above somethings with the affordable capital, you may find you get the reward which is unthinkable for 80% of market players. The market reward the guys who don't take anything others gives to them but select what they want and be sure no risk to lose in probability! In most of time we know too much but we don't know deep enough for what we should. So we miss the vital few and have to worry all of trivial many every day! Could we ask ourselves what is the vital few things we have to do today, tomorrow, and so on? We need answer for this question to guide ourselves to do the most important and profitable things. In long term, my first thing is to ingrain the rule, principles, and guideline for my market business, I have known would help me to get the excellent vital few things into my portfolio and extend them to every corners of my business. In short term, I have to get my cash reserve to the safe level for next 6 months; I have to finish all of jobs around my first draft of my business plan as a road map in the market. Today sold all of my CIG with about 35% profit to collect the cash back, which would reduce the cash flow pressure greatly since the size of initial capital and avoid the selling in fear and panic. Selectivity and Quality Control 80/20 rule means if we want to achieve any excel, we have to be selective for what we do and we want. The selectivity need the quality and quality only could be got from quality control. Stock market is a war place so that any business in the market must has the high standard to control the quality we want at least cost! Low quality and high cost would expose you in risk High quality and high cost would expose you in risk Low quality and extremely low cost would give you the odds to profit High quality and low cost would would give you the odds to profit Ideally we need high quality and extremely low cost. All of the quality and cost depend on how you could find quality and value and just pay the price which will bring down the cost to the possible minimum! How to insert the quality control for our selection process for the low cost and high quality shares. How could we just pick up 10 baggers rather than falling knifes? Do you know you need to focus on the quality of your business! The quality is value and margin of safety! No value in market no quality! No margin of safety no low cost! Quality control is how to get the value with the margin of safety! Trading or investing or speculation with the quality control would fail! Put the trading on the top of investing and speculation is wrong since no quality of your action and your business or your services, you could turn the swans such as BHP and RIO as your falling knifes! How many genius investors have lost their shirts in RIO? How many fools have gained millions dollar from FMG, which was 10c around in 2004/2005? Do you strike to find the future trend and the future swans? Do you strike out to desert the future craps in your portfolio? Selectivity is two way path! To be sure you know to obtain consistently higher quality at lower cost, you need the quality control, which is the job and if you could have a quality system in your business it will contribute the profit for your business. You will behave consciously rather than the guys who just talk about emotion control. You could do your job for high quality but you could not stop yourself in depression if you lose your shirts again and again! What could be used in your quality control? You have to use statistical and behavioral techniques to be sure you get the value at the bargain price. It is to obtain a zero rate of product defects, any kind of falling knife in the market! Why did you lose? It is helpful to see the words from Joseph Juran, the pioneer of quality control, "Rather, the losses are always maldistributed in such a way that a small percentage of the quality characteristics always contributes a high percentage of the quality loss." He gave the footnote for the above words: *The economist Pareto found that wealth was non-uniformly distributed in the same way. Many other instances can be found— the distribution of crime amongst criminals, the distribution of accidents among hazardous processes, etc. Pareto’s principle of unequal distribution applied to distribution of wealth and to distribution of quality losses. What the Paretp's principle? The 80/20 rule! One high quality buying at extremely low cost could compensate high percentage of low quality losses. If you hold high percentage of quality, you would never be in loss! Why did you lose? Who has never win something in the market? However we don't have any quality in the market and we just follow this words and that words to stop the losses! You losses should be the result since your error in your efforts to get high quality at low cost. You losses should be much lower than the profit and then you never lose! You sell some dead shares is not to stop the losses but to tighten your quality control for the high quality at low cost! Why do we so emotional to stop losses? Why do you so emotional? You don't do the job as a qualified quality controller and then you have to go out every second to check what wrong in the sky! You waste your time in the sky and then your house could be on fire! Have you ever tried to find the top 20% problems which cause your 80% losses and fix them? Have you tried to get the solution turn this 20% problems as the benchmarks for the high quality solution? Why not? If you do so you would at least reduce your 80% losses! It is not a bad new your business just has one employee, yourself! You could work to find the way for high quality and low cost! You can fix your own problems if you really want! If you want to have the quality as your base of life you can start to do now without extra cost! What are you doing? Struggle for the definition of the trading, investing, or speculating? It is useless and could not make us qualified and then we could not buy quality at low cost! Do you really want the money over there? Give your quality to the warriors and then your job done and your labor value and business value would be realized. We don't want to do the job so we could not be not emotional! Control? You lose the control for your quality and then you could not control anything!