ORID_4

Obejective

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Workout

Results

Finished the goal but I had a tired feeling after work. Which caused it? I don't know. I think I need a good sleep?

Interpretation

Now a days people trade their assets too frequently. According to the book,

“According to Albert Wojnilower, the average holding period of U.S. Treasury bonds with maturities of ten years or more is only twenty days.3 ”

Excerpt From: Seth A. Klarman. “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.” iBooks.

And investment should eventually generate cash flow

“Investments, even very long-term investments like newly planted timber properties, will eventually throw off cash flow. A machine makes widgets that are marketed, a building is occupied by tenants who pay rent, and trees on a timber property are eventually harvested and sold. ”

Excerpt From: Seth A. Klarman. “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.” iBooks.

When I see this, I start to question about Bitcoin. Because bitcoin is not generating any cash flow for me. It merely sits there. The only cash they can generate is from their eventual sale. By this definition, bitcoin is a speculation. Or, in another perspective, if other cryptocurrencies is based on bitcoin or anchored to bitcoin. Then we might be able to buy it because there is a chance that bitcoin's price goes up due to other cryptocurrencies being introduced to the market.

“Investment success requires an appropriate mind-set. Investing is serious business, not entertainment. If you participate in the financial markets at all, it is crucial to do so as an investor, not as a speculator, and to be certain that you understand the difference. Needless to say, investors are able to distinguish Pepsico from Picasso and understand the difference between an investment and a collectible. When your hard-earned savings and future financial security are at stake, the cost of not distinguishing is unacceptably high.”

Excerpt From: Seth A. Klarman. “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.” iBooks.

This sentence is very important too. We invest because we want to preserve our assets. Preserve our capital. Speculation will only increase the risk of our financial security.

Decision

This book is definitely worth to read. I will keep reading it and make sure I understand the parts in there.