Having timely information is one of the factors of success in the stock market, but just as timely receipt of information and news effective in financial markets is important, not telling these news and not disclosing it is very important.
This rule is so important that successful and well-known investors in stock markets around the world have always been cautious about disclosing their opinions.
For example, in a program, a television reporter asks the famous investor Schwartz, “What are your favorite stocks?"
“I won’t answer your question," he replies.
“Warren Buffett always said he was afraid to talk in his sleep, because his wife might hear it and his investment strategy would be revealed," said Roger Lonstein, another well-known investor.
In this regard, Warren Buffett’s book 23 Principles of Success states: When Benjamin Graham taught at Columbia University, he used common examples of stocks of companies that were valued below the real price to explain his approach. After each class, some of his students quickly bought such shares. Many of his students paid their tuition in this way.
Warren Buffett was like his master in every way (even in his letters to his partners, he imitated Graham’s style).
Except for one thing! In 1953, for example, he taught Omaha’s investment principles class, but unlike Graham, he refused to provide guidance to students.
But what does an expert investor do about it: He almost never talks to anyone about what’s going on. He doesn’t care what other people think of his investment decisions, and he doesn’t involve himself in them.
While the losing investor always talks to others about his current investments, instead of judging his decisions with reality, he tests them with the opinions of others.
But when we look at the biography of Warren Buffett, when he began his partnership in 1956, he told investors: “I run this capital like my own money and I will contribute to its profits and losses." “But I will not tell you what I will do."
At the time, just like today, Buffett did not tell anyone what he was thinking; he did not even reveal the new investor in the company. “The first time I met Warren Buffett, I was looking for a suitable place to invest some money, but when I realized that the specifications of the investments would not be announced," John Trinh said in The Master of Capital, a brief account of Warren Buffett’s life. “I decided not to invest." An action that later made him regret it.
When Buffett told investors he would not say anything about what he was doing, he was serious. One of the partners once entered his office and insisted on knowing where the money had been invested. Buffett was at the time meeting with a banker named Bill Brown (who later became chairman of Boston Bank) and then told his secretary to tell him his head was busy. The secretary returned very quickly and said that the man insisted on meeting you. Buffett disappeared for a moment and then told the secretary, “Give him his share and get him out of the partnership." And when he returned to Brown, he said, “They know my laws." “I report to them once a year."
Today, when hundreds of thousands of transitional investors around the world anticipate any tissue movement, it is important for the tissue to keep its mouth shut and say nothing. But so was his method when he had only $ 100,000 and no one knew him.
Prior to meeting Charlie Manger, Buffett did not talk to anyone about his investments, except after selling them, and often did not even talk to anyone afterwards, especially when he wanted to buy them again in the future.
Why talk to anyone at all? He knew what he was doing. He did not need to validate his views by approving others. As he said at the 1991 annual meeting of shareholders, “Because others agree with you, it cannot be said that you are right or wrong. You are right, because your information is correct and your argument is correct. That fact must be taken into account. " . Another reason why no one tells their thoughts is that “good investment ideas are rare, valuable, and doomed to take over, just as good products or ownership ideas are."
The idea of investing is, in fact, his share of the business world. He will not disclose them, just as Bill Gates does not make his Windows code available for free, or Toyota does not unveil its engine design for next year’s production against Ford and General Motors. There is more to his behavior than self-confidence; the ideas are the fabric of his creatures and his possessions, and they are somewhat sacred.
Keep quiet and buy and sell
Like Warren Buffett, Schwartz retains his investment ideas. In June 1981, when a photo of him appeared on the cover of a corporate investment magazine, he was described as “a mysterious, lonely man who never moves his next move and even keeps his close advisers at a reasonable distance from himself." “It simply came to our notice then." “George has never been so close to me that I know what his inner thoughts are," said Gary Goldstein, who has co-chaired the Quantum Fund and even Schwartz’s personal finances since 1985. “Although I’m aware of his activities, it’s interesting to note that I know very little about him," said Stanley Draken Miller. “He is definitely an ambitious person and at the same time very shy."
Schwartz’s staff were strictly forbidden to speak to the media. That’s why they became known as the “mysterious Schwartz Fund." “The last time I expressed my opinion openly was when I wanted to start my career for George Schwartz," said James Marquez, a former director of the Quantum Fund.
Schwartz did not want anyone to know what they wanted to do. “You’re dealing with a lucrative market, so you have to be anonymous," he says. And he always tried hard not to leave a trace.
Schwartz is so secretive that it is difficult for others to figure out what stocks are being bought, what they are owning, and what stocks they are trying to reduce.
But how can he make a billion-dollar investment but no one knows about it? There is a clue that this is one of the most expensive securities trades in London, whose company has been the agent of the Quantum Fund. “There was a special phone on the CEO’s desk. When that phone rang, he knew Schwartz was behind the line," said the former trader. No one except Boss spoke to George.
When I received orders to execute, I traded 1,000 or 10,000 bills instead of a hundred or so shares, and I had to put them on the market in a way that left no trace. . ” Schwarz had similar reasons to Warren Buffett: “If others knew what he was doing, they would invade the market and the price would go out of Schwartz’s hands." Other traders, unable to understand what he was doing, would follow in his footsteps in the market, as happened in October 1995, and the assumption that Schwartz wanted to sell Frank to France on loan helped help the value of the currency. Against the German mark will fall sharply.
If a stock market transition investor, such as Buffett, declares his intentions, the worst thing that can happen is that other investors suddenly invade the market and the price suddenly rises. For a businessman like Schwartz, who often sells stocks, the price cut could be far worse. In 1978, Schwartz sold stocks to a service company called Resorts on loan. Another investor, Robert Wilson, did the same.
But he announced it to everyone, and he himself traveled the world. As Wilson crossed the ocean on a ship, people rushed into the stock market, raising the price per share from $ 15 to $ 120.
Agents who were on the verge of selling the shares on loan from Wilson told their customers that when the market price rises high enough, Wilson will be forced to offset the pre-sold stocks by reversing the purchase because his resources are limited. Eventually, Wilson’s agents found him and told him that he either had to invest more money or leave. “Buy a stake in Resorts," he said. And the stock market was booming, but Wilson called on the market to push for a bond sale to put pressure on him, which the market did. And his Schwartz, as always, kept his business covered, so no one noticed that he had sold his shares in advance.
When he saw what was happening, he quietly cleared his pre-sold stocks by buying, and then, given the rising stock price, he bought the same ones to take advantage of Wilson’s stupidity. Wilson’s uncertainty is well illustrated by the fact that Schwarz is quite right in saying, “Those who buy and sell are better off keeping quiet and just buying and selling."
But Schwartz is not as quiet as Warren Buffett. Especially since he became known as “the one who bankrupted the Bank of England" and his investment perspective has undoubtedly been appreciated by others. He kept talking to other traders and investors when he was somewhat unfamiliar and shunned the press like a plague.
Sometimes these conversations were to test his ideas. Of course, this was often done because he wanted to improve his understanding of the market by knowing other people’s thoughts and actions; that doesn’t mean that knowing Schwartz’s thoughts is always effective. One day Schwartz spoke a full afternoon about the stock market with a trade deal called Jean Manuel Rojan.
“Schwartz was passionate about falling prices, and he had a detailed theory explaining why it turned out to be completely wrong because the market was booming," Rojan said.
Two years later, Rojan saw Schwartz in a tennis match and asked, “Do you remember our conversation?" “I remember very well, I changed my mind and made a lot of money," Schwartz replied.
Did I do the right thing?
Most investors are constantly asking for guidance and approval for their investments. Years ago, a news bulletin publisher launched a telephone counseling service for its subscribers. One of his employees told me that more than half of the calls were from people who asked, “I just bought these stocks" or “I recently invested in real estate." Everyone, regardless of what they did, asked, “Did I do the right thing?"
The other callers were those who wanted someone to tell them what to do or sought confirmation of what they intended to do. Needless to say, no one has contacted the center with the confidence of Buffett and Schwartz. The independent capitalist thinker thinks. He does not need anyone to confirm the quality of his investment ideas, and that is precisely why he does not tell anyone about his investment decisions.
Published and authored by FalconProfit.com