I THINK THIS IS THE MOST IMPORTANT BLOG I HAVE WRITTEN AND A ‘MUST READ‘. THE CONTENTS WILL FORM THE CENTREPIECE OF MY WEBSITE GOING FORWARD AND SHOULD HELP READERS REFINE THEIR APPROACH.
This is Wheelie’s ‘Get Rich Quick’ scheme*……..
As usual, I am supposed to be hammering out another Blog which I promised you all (HSS Hire) but I have got myself distracted. It is utterly weird how some of these Blog ideas come to me and when I get such inspiration, I feel the need to get on and type ASAP before the idea cools off and I type something substandard. I was having a Shower this morning and it suddenly hit me (the Blog idea, not the Shower Head) and while I was dripping wet I had to rush to my Office (what a grand name for a desk and an old Netbook) and grab some A4 paper and get biro-ing like a demon possessed with Blog Writing fever.
I wonder if I am channelling Blog Ideas from God? Maybe it’s the Market Gods? Am I the New Messiah? The Second Coming? (no, I did not say “Seconds are coming” and you haven’t eaten your greens anyway). This could be the birth of a New Religion - The ‘Wheelies’ (hey, they had the Moonies, so why not?); don’t panic, we don’t go round chopping heads off or any such silliness and the End of the World is not nigh. Well, not for a few Million Years anyway - so plenty of time for your Dog stocks to come good yet !!
I need my Disciples to spread the Religion…….
WD’s Key Elements
Right, now I am back in the room…….the thought was that I wanted to distil down what I consider to be the really Key Elements of what we need to do to make Money steadily and consistently over time with minimal Risk and minimal Effort.
As Safely as possible and as Easily as possible.
The Key Elements are the ‘Building Blocks’ of how we can be Successful in the Markets. Do these right, and we stack the Odds in our favour.
We all read everywhere about these “Get Rich quick” schemes and how various dubious parts of the Financial Services Industry promise us simple ways to make money and how they have the “Secret Formula”.
So it hit me that I need to compete with these Conmen and have my own attractive Offer for everybody - only problem is, mine needs to be Honest, Justifiable, Realistic and able to actually Work. I guess in a way it’s sort of like having a Mission Statement but it is a little more detailed - it’s certainly Strategic - a High Level view of the Essence of what I think we need to do to make Cash in the Markets in a way that will Work (or should do over time).
So, it’s sort of a List of High Level stuff that if we follow it as close as we can, then it SHOULD make us money over a period of years - we can Never be utterly certain this Approach will work - we may need to amend bits of it in years to come, but the Odds are in our favour.
We need to realise that the Stockmarket is an Adaptive, Evolutionary, System. What works for one period of a few Months or Years may not work forever - we need to adapt as the market changes. This is because Investors ‘wise up’ (learn) over time what works as they see other Investors making money by that method - so the ‘Edge’ or ‘Advantage’ is eroded away over time - it is Arbitraged away.
Chris Dillow in Investors Chronicle has a superb Analogy for this - it is like Animals and a Food Source. When the Grub is abundant, the Animals feast on it (the Profits) and after a while, the Nosh dries up and the Animals move elsewhere or die off (no more Profits to be had). So the Cycle begins again - the Tucker starts to grow again (the Profits of the strategy reappear) and this attracts back the Animals. So strategies have a habit of going in and out of favour - unfortunately the Cycle is not all that predictable with regard to its timing (‘Periodicity’ for peeps who love clever words.)
Is it me, or is the Blog Juice flowing tonight? I am pretty pleased with the words flying through my fingers at the moment !!
Interestingly though, the kind of ‘Value and Momentum’ type approach I tend to use, does have a record of working better than most other Strategies over time - this is proved to some extent by the likes of Warren Buffett, but of course such strategies are hard to undertake and an Art Form to a large extent. Hopefully a few simples Key Elements will help us create some pretty acceptable Artwork (no, you cannot hang a nice PETS trade in the Louvre).
An essential point of the Key Elements is that they must be Simples. Complexity is no good - most of us do not have the time or the patience for it - we need something straightforward and easy.
Most of us lead crazily busy lives - I didn’t use to but suddenly I had this bonkers idea to create a Geek’s Finance Website. People have busy and demanding jobs, families, pets, relatives, social commitments, clubs, sports activities, TV Appearances (who?), illnesses, holidays etc. etc. etc. you get the point. Therefore we just do not have the time to sit in front of Computers all day and read countless piles of Finance Industry Propaganda - life is way too short.
I think money can be made by Traders - Day Trading and Position Trading and Forex Trading etc. - but the Stark Truth is that very few people can actually do this (95% of Spreadbetters lose money) and very few of the people reading this Blog will have the time to commit to such Trading. It is also incredibly hard work and you need the right Psychological make up - barely any people in the World have this. So forget it, it ain’t gonna happen, you are not going to ‘Get Rich Quick‘. Mind you, if you work on the stuff in this Blog, you MIGHT get Rich Slowly……or at least you might be in with a chance of getting Rich.
Believe me, with these “Get Rich faster than a Cheetah” schemes, you will get very, very poor. Remember, if the people selling you this ‘system’ are so good, then why are they telling you about it? Why are they not on a beach somewhere surrounded by characters from a Rap Video? Why are they charging you money if they are so good they make millions from their System? (Note, this is one major reason why WheelieDealer will forever be ‘Free to Air’ - I believe in my own Investing Abilities - I do not need to rip my Readers off. I have a real ‘Bee in my Bonnet‘ about this principle.)
We MIGHT not make money, but we will DESERVE to make money.
WD’s Key Elements
“Wheelie, you are losing it dude. You just typed that same heading.”
I know, I can’t think of a better way of doing it. So let’s Adapt. Let’s Evolve. Let’s be Flexible.
I need a brew - hang on…….
(this is a good time to go for a pee, get a beer, kick the dog, check your Stocks, brush the canary (what?), take out the rubbish, tell the boss to stick his job, etc.)
Right, I’m back, where was I?…….the Key Elements, here they are:
(I have split them down into 4 Overarching Areas: Process, Fundamentals, Technical Analysis, Psychology)
Worth the wait, no?
Way longer than I wanted it to be - darn it. However, I have thought very hard about this - these are the things WE TOTALLY MUST DO IF WE ARE GOING TO MOST LIKELY MAKE MONEY AS EASILY AND AS SAFELY AS POSSIBLE.
There is no skimping. If you cannot manage one, then get a grip of it and make it happen.
Think of them as the ‘Building Blocks’ of a ‘System’ that has a very good chance of working.
If you follow this list, you will be stacking the Odds in your favour.
Here is the same List, but with more details. I wanted a ‘Clean’ List for quick reference and a more detailed one as well. Apologies if you find this way of structuring things a bit repetitive.
Note the different numbers of Key Elements under each of the 4 Headings. Don’t be fooled by this and just think that Technical Analysis is unimportant because the List is so small - on the contrary, I think TA is equally as important as everything else - and it helps get your timing better which could be worth 2% to 3% a year on your Total Returns or possibly more.
However, note the length of the List under ‘Psychology’ - I believe that many Investors pay scant attention to Psychology (along with TA) but I think this List should clearly demonstrate how you cannot ignore this Vital Area. In fact, I would probably go so far as to say that Psychology is THE MOST IMPORTANT AREA.
Turned out to be a chunky Blog and a chunky List - shame it cannot be smaller but these are the things we need to get right to make money. However, I intend to do a Blog soon that will have some prioritisation - I am thinking the Top 10 most important Key Elements, then the Next 10 and then the Rest. This should help you focus your efforts on what you can improve first and where it will have the most impact. I thought it best to give you the Full List first so you get a good understanding of where this is going.
Because I am so pleased with this List and the Ideas it represents (what, haven’t I told you?), it is going to become the ‘Centrepiece’ of my Website and I am going to direct my Future Blogs to address these Key Elements - some have been done already, but it will help give a Logical Structure to the Website and give me Direction for what Blogs I need to produce. I am a bit shocked that I have not thought of this earlier !!
The List is going to sit on WheelieDealer2 on the page that currently is called ‘Useful Links’. I will rename it to something like ‘Manifesto / Links’ or whatever. It will go right at the Top with the breakdown of the Prioritisation underneath - once I have sorted that out. I will probably link to this Blog for the details - I have not decided on that yet.
I might have missed a few things and I expect to add some new Key Elements over time - I am sure my Approach will evolve as time passes. I will flag up any changes on the Homepage of WD1 as usual and no doubt Tweet it out (you know I never need much encouragement to whizz out a Tweet !!)
I am gonna go all Karl Marxy now and say that this is Wheelie’s ‘Manifesto for Making Money’ - ‘M3’ - hopefully I'll be able to buy one (in joke for German Car Aficionados). Russell Brand has a Manifesto, so why can’t WheelieD?
“Freedom for Walford !!” (I think that should say “Freedom for Private Investors”.)
I hope this provides the improvement to your Investing that I am pretty sure just writing this has given to me - a very useful exercise and immensely valuable.
You better get applying the Manifesto !!
Up the Revolution, wd
* well, actually, it’s not. There is no such thing. It is Snake Oil. Fiction. Dreamland. Exploitation. Con. A Fool and his money are often parted……
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