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Bitcoin, Marijuana or Warren Buffet Style?

I recently received some inquiries regarding Bitcoin and Marijuana investments. Since many people are attraced by the related headlines, I did some research. Below are some interesting pieces for your reference. 

Pain continues for cryptocurrency investors
https://www.wealthprofessional.ca/business-news/pain-continues-for-cryptocurrency-investors-237241.aspx

BITCOIN MANIA! – Dave Ramsey Rant
https://youtu.be/6ES9wzGyYMU

6 reasons an investment in the pot industry will likely go up in smoke:
https://www.thestar.com/amp/business/2017/11/17/6-reasons-an-investment-in-the-pot-industry-will-likely-go-up-in-smoke-olive.html

Just to be clear, I’m not making any comment on these investments. I’m sure we could always find the pros and cons of each topic. Instead, I’m against making critical financial decisions based on merely reading the news headlines and following the crowd.
My investment philosophy is straightforward. I prefer fund mandates where they would invest in high-quality companies that are:

  • Have a long history in generating good stable cash flow
  • Excellent profit margin
  • Has competitive advantage in the industry
  • It’s not overpriced

One of the greatest investors Warren Buffet has a famous quote:
“Rule#1: Never lose money. Rule#2: Never forget Rule #1.”

To reduce the risk, I prefer building an investment portfolio with the following discipline:

  • Never put all the eggs in one basket.
  • Diversify the portfolio with a mixture of Canadian equities, Global equities, fixed income, and alternative investments
  • Regardless of how well a particular stock is doing, never put more than 5% of the money into it.
  • Regardless of how sound an industry seems to be doing, never put more than 25% of the money into it

I like to work with fund management team that has a sound and disciplined approach. They would make an independent and rational decision based on the understanding of the business and not on the buzz from the market.

If they believe any investments such as Bitcoins or Marijuana are financially sound, they also have the flexibility to invest. However, the key is it has to be a rational decision based on quantitative analysis, and not based on emotion. One can only have a clear vision of the reality when they look pass both greed and fear.

I recently had meetings and conferences with numerous investment companies. I came across a fund manager where he had outperformed Warren Buffet’s track record since 1989 until end of 2017. He and his team would have a deep understanding of each of the business they are investing. He would compare what the intrinsic value of the company versus its current stock price is.

Of course, I’m not suggesting you invest into this fund because we should always evaluate your financial goals, risk tolerance, and investing duration in determining whether it is a suitable choice.

But if you would like to know more about the fund that is managed by this industry veteran, please fill out the online questionnaire: samuelconsultant.com/investment-questionnaires/ 

My last question to you is, would you rather be the rabbit who always jump ups and downs, or be the turtle who is continuously making steady progress in the investment race?

 

Disclaimer: All the details in this website are for general understanding only, not intend to provide any specific advice and could be subjected to changes without notice. Please contact us or consult with a financial professional before making any decision.

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