Thursday, March 19, 2015

Never try to beat the market

Many small investors think that they can beat the market.

When they see that the average stock market return is 8% year on year, they think that they can do better.

They try to beat the market by trading frequently.

In the end, they lose out and achieve sub-par return.  That is because the transaction cost eats into their profits.

If you are new to the stock market, it is good enough to achieve the same return as the index.

You should pay attention to the sentiment in the stock market.  When the fools come in and start to make a lot of money, and brag about it, it is time for you to get out.

Once you get out, you stay out of the market.  The stock market will crash because of the flood of fools who keep the prices high.

The smart investors stay out, and remain out of market until the crash brings the prices down to a decent level.

They buy when the prices are low.  That is why they can beat the market.

Youi need a crisis that brings the share price down as much as 50%.  That is the secret to beat the market.

Never try to beat the market when the market is still bullish.

Wednesday, March 18, 2015

Book Reviews: Managing People by Robert Heller

The first time I read Managing People by Robert Heller was when studying for examination years ago.

The textbooks recommended by the college were very wordy and full of theories. I hated theories. I hated memorizing all the theories on human resource management. The college textbooks were very expensive. I refused to part with the money.

I still feel that the information I get from Managing People and other books are better than the college recommended textbooks.

I prefer to read simple, and concise books. Managing People by Robert Heller is one of my favorite books.

Managing People by Robert Heller has less than seventy pages of text. All the important key points are highlighted in a yellow box. Managing People is a book with many photographs for illustration purpose.

Robert Heller manages to avoid most theories in Managing People. Even when he refers to the theory, such as Theory X Management and Theory Y Management, he uses simple English and chart to explain. Many college level textbooks use many pages to explain Theory X Management and Theory Y Management. Robert Heller uses half a page.

I like the information in the first chapter of Managing People. The first chapter is about developing basic people skills. There are only two important points in this chapter. The first point is: Try to influence behavior rather than to change personalities. The second point is: Encourage and reward constructive behavior.

These two are very important key points not just for examination purpose. These two are very important key points for living a happy life. It is impossible to change personalities. Many stupid people have tried to change the personalities of their spouses. They take a few years of painful experience to find out that they cannot change anyone. The best they can do is to influence behavior.

The first chapter of Managing People gives some examples of changing negative characteristics with positive characteristics. Robert Heller mentions that the natural behavior is to “react emotionally when information is received.” The appropriate behavior is “establishing the facts using a pragmatic approach.”

Managing People by Robert Heller is written for managers. However, I find that many principles in Managing People are appropriate for everyone. After all, all of us need to manage our relationship with so many people in a day.

Managing People by Robert Heller helped me pass the examination. I was able to use some examples in Managing People in the examination. I learnt the ability to use simple English to explain a difficult concept. This ability helped me to complete a three-hour examination in an hour's time.

I recommend all college students taking human resource management to read Managing People by Robert Heller. In fact, I hope that everyone has a chance to read this compact, little book, and improve communication skill.