Kindle Notes & Highlights
they do not take time to understand the company or business in which they intend to invest; number two, they follow others when selecting investments, without understanding why someone is investing in a particular company; number three impatience or overthinking, and lastly; number four is panic selling. It
Fundamenta
Stocks fall into many categories, you have cyclicals, stalwarts, fast growers, slow growers, asset plays, etc. Many successful investors might mitigate risk by investing in companies that have high dividends.
cyclical
do not invest in a cyclical on the wrong part of the cycle,
Investing on cycles
do not invest in a fast grower without expecting great risk. Know why you are investing in a particular company and what you expect to gain from that particular investment.
When stocks decline because of economic factors and not factors directly related to the business, just know that shortly after a downturn there is an upturn.
Economic
His strategy is simple, buy undervalued securities that pay handsome dividends.
Strategy
Since the only way to make money from any stock investment is either through capital gains or dividends,
Dividend
The final thing I must bring up that disturbs me is the lack of emphasis being put on cash flow when selecting current investments. Bill Ackman said, “The single most important factor is cash flow.” I can’t stress this enough; cash flow is the single most important factor when investing.
Cashflow
In the end, the single most important factor, what most defines your success or potential return is the price you pay for a security.
Price
A good company at an exorbitant price is not a good stock.
Wall Street advises you to invest in a bull market which by definition is a general increase in securities by 20% and urge you to sell during corrections and bear markets which are defined as declines of 10% and 20% respectively. They want you to buy at a markup and sell at a discount.
Buy sell
“Companies without debt can’t go bankrupt,”
Dept
very wary of how a company manages their cash and whether they take on debt without needing to. What is more, pay careful attention to the ventures a company undergoes, not all ventures are worth investing in and if management has a reputation of overspending or overcommitting to unprofitable enterprises it may be best to stay away.
Cash
A company can have a moat because they can manufacture something at a lower cost thus sell at a more favorable price, or they can have a good reputation among consumers, good location, qualitative or quantitative factors, etc.
Moat
Success is guaranteed if you prioritize value over price.
