Guerrilla Forces and Private Investors have a lot more in common than you think!

Being a Guerrilla in warfare means you have to use all the resources you can, including using the enemies’ own arsenal against them. In the war between the Americans and the Vietnamese Guerrillas, the Americans had greater numbers and more weapons. They should have been able to annihilate their enemy, but they couldn’t. Why? The Guerrilla forces took every shell left unused from each battle and sat in the trees, completely camouflaged, waiting for an enemy troop to walk past. They would then ambush them using their enemies’ own ammunition!

Guerrilla forces are also expected to live off the land and a tiny amount of food. By the end of the war the majority of equipment used by the Guerrilla forces was American, stolen, captured or purchased from the opposition. One of the Guerrillas’ key strengths was that they where determined not to give up and used their greater flexibility to move faster than their much more numerous opposition.

What can we learn from the Vietnamese Guerrillas? That the same tactics can be used in investment. Like resourceful Guerrillas, private investors are subject to larger financial organizations that drive markets. Private Investors have to find weaknesses in the system and exploit the small opportunities that the market provides. The private investor must adopt a survival strategy entirely different from how big financial firms operate. This provides the opportunity to gain an advantage, even if it’s very small.

You must remember, however, that the Private Investor has many advantages over big financial organizations. One fundamental rule is to make the most of these and refuse to play the game on their terms!

Here are just some of the tactics used by Guerrilla Investors to gain a competitive advantage:

• Guerrilla investors are not in competition with anyone and no-one needs to know how well or badly you are doing. You are not under pressure to produce huge gains for clients.
• As a private investor, the only person who can fire you is… you!
• Guerrilla Investors rarely listen to tipsters, even if they are close friends, newspaper journalists or TV experts. Everyone is a potential enemy. Use your own research on a company alone to judge whether or not to buy a stock.
• Guerrilla Investors only use money that they are prepared to lose. If you can’t afford to play then don’t. This is a fundamental rule to remember when trading.
• Guerrilla investors choose shares that have been discarded by major investors and pick them up at low value when the bigger boys are running in the opposite direction. They wait and stealthily sell when the time is right, not attracting attention to themselves.
• Always know your exit out of the stock. Do you want to gain 10%, 20% or 100% before you sell? Guerrilla Investors will be actively building an exit strategy for each of their share portfolios.
• Finally, remember that if you’re succeeding with a stock that there is always someone else losing out. This is a cut-throat market. Don’t overestimate or underestimate your target, just make sure you’ve done  adequate research to make sure you’ve found that winning stock.

Good Private Investors are just like Guerrillas in the Vietnam War. We are outnumbered by large financial firms (with money and political influence) but still have many ways to win psychological battles on the market floor and achieve investment gains. Still, every private investor must be wary and realistic at all times when choosing which battles to enter and which battles to avoid like the plague.

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