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In high school, I won a lot of tennis matches. I hoped to play college tennis. At least, I hoped to play college tennis until I started playing matches against other aspiring collegiate tennis players. You see, ordinary tennis players win matches by returning the ball more times than their opponent. College tennis players win […]
The single most popular trend in investing today is passive investing. Most people associate passive investing with low cost, broad based index funds like those you can purchase at Vanguard. But can you be a passive investor with a more complex strategy? M1 Finance thinks you can. Their innovative investing platform brings together the best […]
You’ve likely heard that investing is important. You’ve probably hear that investing is the best way to grow your money over time. But what exactly is investing, and how do you get started? According to the dictionary, here’s the definition of investing. Investing: to expend money with the expectation of achieving profit or material result by […]
A big part of investing is knowing what NOT to invest in. For me, I like to invest in companies with a solid plan to profitability, that even a monkey could run, like utility stocks. However, it is essential to avoid companies that have no solid profitability plans, like Best Buy. Here is what I’m […]
Search for great companies to invest in. You only need a few high quality stocks in order to accumulate wealth.
Search for great stocks. This will take a lot of time upfront but will be worth it in the end.
Look at a company’s current performance over their future projections. Focus on the quantitative measures of value of existing assets and current earnings power
Learn Walter Schloss’s three criterion for stock picking to choose quality stocks.
The earnings of a small company fluctuate more compared to medium and large companies.
Invest in companies with a low P/E ratio. The buy price should not be more than 15 times average earnings over the past 3 years.
The S&P rates stocks from A+ to D on their earnings growth and stability over the past 10 years. Invest in companies with high ratings.
Apply Fisher’s 15 factors to find great companies to invest in.
A company’s sales growth generates more free cash flows. This enables the company to pay more dividends, reinvest profitably or to buy back stocks.
Historically, markets move to the extreme. However, both bear and bull markets are temporary.
The Market has a tendency to react sharply on bad news. This gives you an opportunity to buy a good company at a cheap price.
Invest in companies with low debt. Debt increases the risk profile of the investment.
Walter Schloss, a well-known super investor, advises that a holding period should range between four to five years as depressed stocks can take time to turn around.
Stocks of cyclical industries depend on global prices. The holding period for such stocks is longer for reasonable gain.
Focus on a company’s assets and not on projected earnings. Buy stocks at or below their book value.