The Best Investment

I was surfing around on the web and stumbled upon a video by my "mentor", Warren Buffett with regards to the best investment.

And he said that the best investment is investing in yourself. What does this mean? It means that you take the time to learn and expand your circle of competence. I discussed circle of competence in a previous post, but I'll explain it again here.

Your circle of competence is your environment. The people you deal with, the products and services you buy, the company you work for, the school you went to.

Lets take for example my circle. I live in Cebu city, so the electricity I use is supplied by VECO, which is owned by Aboitiz Power(AP). I buy my groceries from Robinsons owned by JG Summit(JGS), or in SM (SMPH), or in Ayala (AC), which ever is more convenient for me. I use Banco de Oro(BDO) as my bank.

I am currently using Globe(GLO) as my cellphone network. I buy my vitamins and medicines from 360 pharmacy, owned by PGOLD.

So just by living day-to-day, I am already doing my market research...As a consumer, I am always looking out for the best products.

Please note that I said "best" and not cheapest. Best is defined as follows: perceived value = product/service.  In the  Philippines and everywhere else in the world, almost all products are produced by China, and these products dominated the market due to its low price. So people went off to buy China-made dvd players, Television sets, umbrellas, cellphones, furniture, candies, children's toys, etc.

As time passed, people began to realize that cheap doesn't mean value. DVD players would stop functioning in 2-3 months, furniture would break down in a year. Candies and children's toys had poisonous chemicals in them.

My point is, we need to look beyond the price and focus on the value. Heck, I worked my ass off for my money and this is the sh*t I get? Hell no!

So I learned my lesson. I now look for quality that will give me what I think is my money's worth. But then, how do I know if its good quality or not? How do I know if the company I'm planning to invest in will give me substantial Return On Investment(ROI)? Simple...you already have your circle of competence.

What's important isn't how big your circle is, what's important is that you stay in it. So don't pay attention to people when they begin to talk about some mining stock you've never heard about. It's not in your circle.

When people talk about an e-company that is the number one online game provider in the Philippines,  it's not in your circle. Just listen, absorb, process, and discard for future reference.

Now, going back to investing yourself. I remember reading Sherlock Holmes and his take on a human's memory capacity. Did you know that Sherlock Holmes, the greatest fictional detective did not know that the earth revolved around the sun? Read A Study in Scarlet if you don't believe me.

Sherlock Holmes said that a person's memory is like a room. Each piece of information is like a piece of furniture you put into that room. You can only put so much furniture in there that it gets full. So what do you do? you throw out other furniture to make room for new ones.

What he's trying to say is that one must be selective in allowing what information to retain, and what to discard.

"So what's your point Crimson?", you ask. My point is: expand your circle slowly with quality information. And to be honest with you, my circle isn't that big. I am now very very selective on what I focus on, and you should too.

And I am so very thankful to Bro. Bo Sanchez for changing my way of thinking. Sure, I learned from Warren Buffett, Peter Lynch, and William O'neil, but it was Brother Bo Sanchez who made me want to learn.

And change is not easy because change must come from within you.

So invest in yourself... expand your financial literacy. For me, the starting place was in Bro. Bo's Truly Rich Club.

And I invite you to join because the mp3 downloads you will have access to are priceless. And the books Bro. Bo gives every Christmas are such excellent gifts. And the spiritual growth you gain from his daily emails fills you with harmony.

Join the Truly Rich Club now!

May God bless you and your investments!

P.S. I'll be giving out a stock update later today, so watch out for it!