Why
does knowing your place in the food chain matter?
It's important to be objective about your place in the
scheme of things because, like many forms of gambling, you are competing with
other people for your slice of pie.
Consider what happens when you
buy some shares. Someone else sold those shares.
Admittedly some shares are sold because the seller
needed the cash, or for tax reasons or whatever, but
in many cases the seller is effectively betting real
money that the decision you are taking is wrong. There
is no doubt that Whales and Sharks are, in general,
making profits out of the sharemarket. Where is all
that money coming from? Some is coming from the growing
economy, the expanding pie, but a lot also comes from
eating Plankton and Fish for dinner.
This does not mean that Plankton
and Fish cannot survive and prosper in the ocean.
It simply means you must be very cautious and very
quick on your feet. (All right, I know fish don't
have feet!) Be especially cautious about 'hot tips'
on speculative stocks from people who are clearly
not Whales or Sharks. Sometimes rumours are deliberately
leaked to the market in order to lure buyers into
a stock, so that those really in the know can exit.
Also, remember that just as one Swallow does not a
summer make, one sharemarket success does not a market
guru make. This is worth considering both in relation
to the advice of others and in relation to your own
skills. There is an old saying...'even the blind
chicken sometimes finds the corn'.
If you are a small or inexperienced player in the sharemarket and wish to
gamble in the specs, the following advice will serve you well.
-
Never
invest money you cannot afford to lose.
-
Never
buy more stock than you can afford, on the assumption of a quick sale and
profit.
-
Never
leverage your purchases by borrowing to buy speculative shares.
-
Whenever
possible use the skills and experience of a friendly
Shark, such as a stockbroker or successful professional
investor.
