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Trading What could be if you pay too much?

Discussion in 'Shares' started by wdongli, 19th Jun, 2011.

  1. wdongli

    wdongli Well-Known Member

    31st Mar, 2010
    In the market everyone could be bad lucky sometimes. How could you organize the worst time for your worst results from your market playing?

    You have to consider your cash flow status. Too many market players have not any expertise in business, economy, and mass psychology would be shocked when the bad lucks hit them. In GFC and the existing correction, too many had to sell since they could not afford to hold without matter what tomorrow would be.

    In business, cash is the blood to be viable. In the market it is the same to every market player. You need the cash to spend for you and your families. Once you could not have the cash for the necessities of your life, you have to no choice to sell even at the price at great discount.

    Actually every time when you were forced to sell you would start your journey to be bankrupted if you could not stop the losses. In this sense, the stop-losses is necessary but never be a step you would be cheerful to wave it as your market guideline.

    When you regularly become the people to stop the losses and fail to stop in time, it could become huge enough to destroy your financial background. Usually stop-losses comes with the pains and pressure, which tends to drive anyone to be crazy.

    It is not because we are bad but it is because we are human with the instinct to run away in the ruins and then we miss the chances to grip on the bargain and discount.

    After selling on fire, your gut would become very fragile. You would try to work hard in the office and your workshop. You would fail to be confident for your market playing. You could have any cash in hand and have to cut off any buying in the market or say bye bye to the market and return to be a loyal employee. That is not bad but definitely is the end of your dreams from the market.

    You would lose all chances to be financial independent let alone to realize your personal legend. You lose the fighting in the market and then you lose the financial profitability too for your future. The tight hands would lead to further loss of financial flexibility with sure prospective.

    Do you know you are the CEO of your own future business and life? Do you know you don't have the right to complain and blame others for your life failure and shirt losses until you accept the fact you are bad CEO and have not any qualities to do your own jobs!

    Every firm could lose but what does its board do?

    We should be businesslike market players. We should promote us to act as excellent CEOs for our own businesses. Let's what the board would do in crises!

    If the corporation’s financial strain becomes acute, the board of directors may take the comparatively extreme step of cutting or eliminating the dividend. (About the only measures more extreme than elimination of the dividend are severe retrenchment, entailing a sell-off of core assets to generate cash, and cessation of interest payments, or default.)

    Reducing the dividend is a step that corporations try very hard to avoid, for fear of losing favor with investors and consequently suffering an increase in cost of capital. Boards sometimes go so far as to borrow to maintain a dividend at its existing rate. This tactic cannot continue over an extended period, lest interest costs rise while internal cash generation stagnates, ultimately leading to insolvency.

    Could you do better to avoid the strain of your market business becoming acute? Since we could make mistakes, could we turn the crises as chances rather than run in the ruins hopelessly? How?

    Never and ever say it is not your own problem and you never make things worse! Be honest to your own problems and learn from the Great People and get the knowledge, skills, and then the wisdom and necessary behaviors in the market. Could you cut your tumors in your mind or at least try to do so?