Investments

1. don't rush into making investments .
2. don't put all the eggs into one basket - spread the investments .
3. vary the investments over type . Ensure a high proportion is placed in safe investments .
4. actively manage the investments - don't rely on others 100% . Don't make assumptions - check everything out .
5. beware of experts - experts cock up expertly . Just because someone is highly intelligent in one area does not mean that they are experts in all areas . People can be extremely stupid - even the bright ones . Listen to those who do actually know what they are talking about . Look at the logic - look at who is saying what and whether what they say has any merit . Avoid fad's like the plague . Ultimately - make up your own mind .
6. keep very clear of witch doctors - they will cause a lot of damage and will cost you a lot of money .
7. always adhere to the basic business 101 . Make sure all the basics are there - that they all stack up . Check that they know and see what they are doing . Check that they are doing everything right .
8. do the maths .
9. invest in innovation .
10. don't invest in companies that are highly geared - their capital value is their purported value minus their gearing amount - ie. nil .
    A company that needs to raise cash - more than 10% of it's worth - should issue shares . After this has been used - eg. to expand - and if there is a surplus this can then either be paid back to the share holders or be invested by the company .
    If a company is merging or taking over another company there is no point in it taking on debt - it should issue shares . Share holders are share holders irrespective of whose assets they own .
11. ensure that all companies that you invest in have clear and substantial - tangible - assets .
12. if a company has a product - eg. software - ensure that they are developing that product - the software - as an asset and are marketing it as a commodity .
13. if their asset is their people - ie. they are a service company such as a project management company - their assets can walk away - hence they have no actual assets - so avoid .
14. the ideal investment returns around 5%PA ( or 3%PA after adjustment for inflation ) and reinvests any excess of that within the company . It maintains or increases it's capital value - this is very important especially with software based companies .
15. check the life of the company assets - software has a limited life - eg. 5 years - and has to be constantly updated - ie. new asset value added to it - as such - this must be built into the company income and into the expected income derived from the company .
16. don't forget - with some investments - such as stock market trading and foreign exchange and derivaives trading there is a winner and a loser .
17. this is very much a time to invest in bricks and mortar - ie. invest directly in companies , preferably private , rather than in securities etc. . It is important to ensure that value remains real .
18. invest in new companies - start up - exploit new market opportunities - build them up - when the time is right - sell them on - the industry will consolidate - monoliths will be built - the monoliths will have the seeds of their own destruction - you will have the money and will be able to move on - that's surviving and prospering .
19. be very careful of bogus science and bogus engineering companies - there are quite a few of them around . I can't stress this more . There are many projects being put forward that are based on very poor science . What these are are essentially capital shifting projects - money being shifted from the investors hands into the entrepreneur's hands and the first rung investor's hands . They are being promoted and being run by witch doctors and they have a lot of emotion - a lot of 'feel good' - associated with them . However they have almost nil prospect of making any money - their science and their engineering certainly won't work .
20. don't invest in f iat currency - government and corporate bonds etc. . It's very likely that there will be a collapsing of currencies - probably via inflation and QE - in order to reduce the value of public and private debt .

Making the Right Investments

There are two ways to lose money when making investments :-

1. not investing in the right companies . This is often because the project was rubbished by an expert - the expert was wrong - the investor listened to the expert and didn't make the investment .
2. investing in the wrong companies . This is often because the project was promoted by an expert - the expert was wrong - the investor listened to the expert and made the investment . Point to note here - there is a trend in some circles not to 'rubbish' anything - proposals etc. . 'Rubbishing' - challenging - is vitally important as it helps to determine whether a proposal stands up .

Good judgement is always vitally important . Fantasy is not reality - fantasy costs money ( except in the movies where it makes money ) . All that investments in fantasies produce is income for all those involved except the investors . Reality is what produces money for all concerned .

The critic is often the most loyal person because the critic sees what is wrong and what needs to be done to make it right . The yes man & woman is the person who will support everything , as long as it pays them to do so , so is often the least loyal - as long as they get paid , the company can go down , and they will just move on - nothing lost as far as they are concerned .

The question is "how much are you prepared to pay for that fantasy ?" - if it's a fiver and it's an enjoyable movie then it's worth it - if it's a million and it's a business gone bust then it's not worth it .