Philosophy of Great Investors II “Be fearful when others are greedy. Be greedy when others are fearful.”Warren Buffett. Chairman, Berkshire Hathaway Don’t Let Emotions Guide Your Investment Decisions Great investors throughout history have recognized the value of making decisions that may not feel good at the time but that will bear fruit over the long term–such as investing in areas of the market that investors are avoiding and avoiding …
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Philosophy of Great Investors “Individuals who cannot master their emotions are ill-suited to profit from the investment process.” Benjamin Graham. Father of Value Investing Avoid Self-Destructive Investor Behavior Chasing the hot-performing investment category or making major tweaks to your long-term investment plan can sabotage your ability to build wealth. Instead, work closely with your financial advisor to outline your long-term goals, develop a plan to achieve them and set the …
Read MoreWarren Buffett’s Investment Rules | Why I Simply Stick to Rule #1?
Warren Buffett’s 2 Rules in Investing Warren Buffett has 2 rules in Investing. Rule #1: Don’t lose money. Rule #2: Refer to Rule #1. Personally, I love these 2 rules because losing money is not only painful, but it decreases your chance of your financial dreams dramatically. Imagine you started with $50,000. With the right rate of compounding of say 20% and when you let it compound long enough, you …
Read MoreStupid in Small
Stupid in Small I once heard a story of Warren Buffett playing golf with Bill Gates and their group of friends, not sure if it is a true story, but I found the story behind it very powerful. And also, personally I don’t play Golf so please pardon me if certain terminology is inaccurate. The group of friends came to the Par 3, which is apparently the one which has …
Read MoreThe 4 steps of Stock Investing
The 4 Steps of Stock Investing Whenever friends ask me what stocks to buy? I will answer that if I tell them “what stocks to buy” is only 1 step out of the 4 steps of the investing process and it will not be complete unless I show them the entire 4 steps. Lets take a look at the 4 steps A-B-C-D stock investment process: A – Assess: Going …
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Investment in Stocks We all need to invest and I love to invest in various investments. Some of the investment vehicles could be: 1) Stock 2) Bonds 3) Mutual Funds 4) Real Estate 5) Land Banking 6) Precious Metals 7) Collectibles 8) Small Businesses Of all these, I love the stock market for these reasons: 1) Small Capital Outlay You need not have huge capital to start stock investments. …
Read MoreUnderstanding Financial Health of a Company
Understanding Financial Health of a Company In dissecting a business to check its “health”, we make use of the 3 Financial Statements: Balance Sheet Income Statement Cash Flow In this post, we will look into the balance sheet: The Balance Sheet The Balance Sheet is a financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time. These three balance sheet segments give investors an idea as …
Read MoreThe 4 Question Check List
The 4 Question Check List There is some probing questions you can ask when faced with a company you suspect has a competitive advantage Q1: What is the Value the business is providing? Lets take for example we talk about KFC. The value is yummy chicken. We then move on to the next question. Q2: Can you get it else where? The answer is yes to this question. …
Read MoreCompetitive Advantage Part 2
Competitive Advantage Part 2 In the last post about competitive advantage we looked at the first 2 ways which a company can build an economic moat. Today let’s explore the other 3 ways: Low Costs or Prices Offering the same or similar product or service at a lower price can be a powerful economic moat, especially in commodity industries. Airlines and PCs are a couple of commodity industries. Cost advantages …
Read MoreCompetitive Advantage Part 1
Competitive Advantage Part 1 In general there are 5 ways for a company to build a competitive advantage over its peers. Warren Buffet calls this competitive advantage as “economic moat”. An economic moat is the ability of the company to keep its competitors at bay from hurting its profits. The wider the moat, the longer the company can protect its profits. The deeper the moat, the more profitable is the …
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