My Style of Investing

When it comes to stock investing, I believe the surest way to prosperity is through a long-term focus on value investing. The power of compounding is simply amazing and the greatest way to exploit this is through holding long-term stocks that, in Buffet's words, have a "durable competitive advantage".

However, I am not completely convinced on the value-investing approach and read extensively on other methodologies. In particular, I feel a top-down style of investing has merit, whereby the investor drills his way down from prospective countries all the way to a specific company within a promising industry. This differs from Buffet's thesis, which focuses on bottom-up analysis.

As another note, I do follow Technical Analysis and use it when entering/exiting a trade. However, I believe solely using T/A is not suitable for long-term investing, but I do look at it because it moves the markets in the short-run.

Thus, I am at a crossroads between the various styles of investing and I feel it's going to be a long time before I choose an investment methodology that suits my style and compounds my wealth the quickest.

As a final remark, I believe I have a great advantage investing as a private investor with little to invest as opposed to an institutional firm or other entity with millions to invest. I have the ability to put my money into stocks with low liquidity and whose intrinsic values differ more widely from their current market price than larger-cap stocks. Those who swing a bigger line need to stick with large-cap companies that have ample liquidity. The other aspect of my investing (which in my opinion is advantageous) is the fact that my net worth will rise by more than 5-fold upon receiving a full-time offer at graduation. Since the money I invest is limited to summer money I've made, I have the advantage of learning from my mistakes and failures at a very VERY cheap cost. It's much better to learn about the importance of stop-losses from a $500 dollar loss than from a $500 million loss. Further, since the money I invest now will have little/no impact on my future net worth yet it still hurts greatly when I lose money, I have the great opportunity to experiment with different styles of investing and learn the pros/cons.