Countercyclical investing - that's easy to say
There is much to be said for countercyclical buying decisions on the stock exchange. "Always buy straw hats in winter" - is an old stock exchange saying. It is only in the next bear market that you really notice how painful it is to have a stock on the top on a top cycle. Why is it that many investors keep making the same timing mistake?
Almost all investors end up with pro-cyclical investment behavior. They join the big herd, to the music dictated by the financial media. The stock market comments play an unfortunate role. They have the ungrateful task of inventing day after day, even hour after hour, something that could have driven courses up or down. Financial journalist M. Gburek pointed out that the emphasis is not on "finding" but on the word "inventing". The explanations for the course changes must be made afterwards.
The herd instinct on the stock exchange, i.e. the pro-cyclical investment behavior of investors, is based on the subconscious and on the deep-seated desire to be part of a group. This group membership helps to overcome self-uncertainty and increases self-confidence. It is coupled with the desire and striving for recognition and praise. This removes some of the doubt from the investor as to whether his investment decision was correct. As a rule, the pro-cyclical investors all end up in the same pit. If you want to take the countercyclical path, you first have to start working on your own mental attitude. This is not easy, but it is possible and above all promising.
Look for the pearls in everyday life
Most investors have bought the cutting. When it comes to finding the best stock investment, they hang their wings. The super investment ideas are in front of you every day.
I keep finding that so many private investors lack self-confidence. It is a pity. They surrendered when it came to research and finding the best stock investment. You feel lost in a complicated flood of data, showered with daily reports. Macroeconomic statistics and economic economic forecasts have a paralyzing effect on investors. In addition, the political din, with a focus on hot spots and minority problems, is spreading fear and terror. The excessive respect for the financial system with its "technical" is unnecessary. He is leading the investor on the wrong track. As I see it, the crowd of investors blindly runs after bank consultants, analysts or TV finance experts. They eagerly hope to pick up one or the other stock tip.
The search for a safe haven for your capital is not something that has to take place in classy meeting rooms in the skyscraper. The same applies to those investors who want to take control of the scepter themselves: Research does not begin with an academic challenge in a quiet closet. The starting point cannot be brooding with worry lines over the laptop at night - chasing from chat room to chat room. It is only a matter of time before the investor ends up being a victim of clever manipulators and masterminds.
Good solutions can be simple: it depends on your own thoughts
As is so often the case, the really good solutions are quite simple. In search of convincing equity investments, it means going through the world with your eyes open. In everyday life, we are surrounded by companies, branded goods, services and products. Early on in my life, I got used to "storing and filtering" everything around me for a possible investment.
So it depends on the "programming" of your own thoughts. Knocking the conversion of what you see or what you're dealing with into the stock market is the trick. Rethinking costs nothing, just a little effort and discipline in the beginning. The advantage is that the investor always carries this research filter with him. No matter where it is, the device is always available. The investor is not dependent on others. The longer he practices this "conceptual transformation model", the easier it will be for him. If you train your brain cells in this way, you will find that knocking off a possible stock market investment takes place after a while, so to speak, by autopilot.
Some investors will then be horrified to find out what they have missed. In front of his nose, day after day, without financial mathematics, he actually saw the best investments, but he did not "recognize" the huge opportunity as an investor. Let's take a walk through any city. In the pedestrian zone you notice a chain store. Drugstore chains from DMDrogerie, Rossmann or Müller - unfortunately none. The drugstore division obviously belongs to private owners. There is obviously nothing to be done for the investor. The companies are not listed on the stock exchange. The avid investor does not give up here.
Learn from visiting a drug store
If we go into one of the drugstores, we will find well-known branded articles. For example: level and L'Oréal care products. Persil detergent and Calgon for the washing machine are on the shelf further back. You will admit to discover this, no asset manager is required. Almost every investor has probably known these brands since childhood. And he has probably noticed or heard over time that the quality is right and that Article be bought year after year by loyal consumers. With this fictional, short visit to a drugstore, you would have hit the bull's eye as an investor. Behind these four brands are the joint stock companies Beiersdorf, L'Oréal, Henkel and Reckitt Benckiser. They have all been listed on the stock exchange for a long time. I recommend that you first sit down before you switch on the computer at home - after your city walk. You will be amazed at what you missed. This will be a shock to you.
If you look at the stock price developments, preferably the ten-year charts, you will see that your capital alone would have multiplied only with these four stocks. Let's compare the prices from May 2006 with those from May 2016: Beiersdorf (Nivea) rose in price from 37 Euro to 80 Euro, L'Oréal in the same period from 71 Euro to 158 Euro, the Henkel share (Persil) from 29 Euro on 100 Euro and the good company Reckitt Benckiser (Calgon) from 19 British Pounds to 66 British Pounds. In the ten years, these four shares have survived two stock market failures (2002 and 2008). A threat to the company was never discussed. Unfortunately, the Internet provides hardly any further historical data. However, I can assure you that the 15 annual chart and the 20 annual chart are even more impressive. At the same time, the annual dividend payments from Beiersdorf, L'Oréal, Henkel and Reckitt Benckiser have increased substantially over the past ten years.
The “viewing universe” for investors is almost inexhaustible. Whether at home, on vacation or on business trips: It is entirely up to you where you look. Whether you drive an Audi rental car into the underground car park, get into a Schindler elevator, have a Jack Daniels Whiskey in the hotel lobby. Whether your installer is installing a GeberitWC flush at home when renovating the bathroom or whether your elderly father is getting a new hip joint in the hospital. Or take a look around in your professional environment of the competition, your customers and suppliers ... no matter, you will come across amazing investment ideas everywhere.
If you feel insecure, go to a professional with your own ideas catalog; ideally to a trusted advisor who is familiar with balance sheets. So you can be sure that the company is also financially sound. Don't be fooled, but turn away from the stock market as a speculative institution. Instead, focus on first-class companies on the stock exchange. I would participate in these in the long term - like an entrepreneur - as a shareholder. And where do you find the good ideas? On your doorstep.you have good ideas? On your doorstep.
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German edition: ISBN 9783965961012
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