Investing Strategy

  • 28 Sep
    This Is How You Find Stocks With A Margin Of Safety

    This Is How You Find Stocks With A Margin Of Safety

    • It’s impossible to accurately determine the actual value of a stock, but there are some methods that allow you to come close.
    • What’s even better is when you can buy at a price much lower than your intrinsic value calculation.
    • Qualitative factors can also help in assessing the margin of safety.

    Introduction

    The best investments are those that carry no risk with unlimited upside.

    Given that the markets are inefficient, it’s possible to find such investments and in today’s article, I’m going to describe the best ways to figure out what the margin of safety is in an investment. More →

  • 27 Sep
    Looking For Multi-Baggers? Here’s 3 Practical Ways To Double Your Money Now

    Looking For Multi-Baggers? Here’s 3 Practical Ways To Double Your Money Now

    • A mutli-bagger is a stock that doubles or more. These stocks are great to own, but not that easy to find. We’ll discuss the necessary mindset to take advantage of such opportunities.
    • Apart from the mindset, it’s also necessary to understand the environment and look to places where multi-baggers can be found.
    • The final decision comes down to how much of your portfolio should be allocated to such investments.

    Introduction

    There are different reasons why people invest.

    Some invest to protect their capital from inflation, others to build up a retirement nest egg, while others seek extraordinary returns. More →

  • 26 Sep
    The Best Strategies For Investing Late In The Economic Cycle

    The Best Strategies For Investing Late In The Economic Cycle

    • What has to be done in the late part of the economic cycle isn’t a secret. I’ll describe the how and what.
    • However, as always in investing, the question is why we aren’t doing the rational thing.
    • I’ll ask you a question that will help you answer how much and whether you should rebalance.

    Introduction

    Yesterday, we discussed how the economy is in the late part of the economic cycle and everything is leading toward a recession.

    No one knows exactly when the next recession will start or what the trigger will be. So the only thing to do is to be prepared. More →

  • 22 Sep
    This Is Why A Market Crash Is Good For You

    This Is Why A Market Crash Is Good For You

    • It might sound counterintuitive, but high stock prices aren’t that great for the majority of investors.
    • If you take the perspective that looks at long term returns and actual business ownership, your future income would be much higher now if the S&P 500 had stayed at 1,000 points for the past 10 years.
    • Don’t think stock markets only go up, look to Japan to be reminded of that.

    Introduction

    Everybody is so afraid of a stock market crash and here I am talking about how it can be good for you.

    As much as it sounds counterintuitive, a high stock market isn’t good for long term investors. The ultimate goal every investor should have is to accumulate as much ownership as possible, not to gain temporary value. More →

  • 21 Sep
    Here’s Why You Need To Think About The Current Market Risks

    Here’s Why You Need To Think About The Current Market Risks

    • Evolution hasn’t created us to look at risks in investing, which is something that can be very costly.
    • I’ll discuss in a simple, but straightforward way what the current market risks are to be aware of.
    • If you’re careful, you can earn up to $500k in 20 years on a $100k portfolio.

    Introduction

    Investing is a very delicate thing and few understand that we aren’t wired for success in it. Part of our brain, the amygdala, through millions of years of evolution, has taught us to fight when we might be wrong, to prove our dominance and our convictions in order to prevail and spread our genetics. More →

  • 15 Sep
    How Jim Rogers Saw 4,200% Returns In 10 Years & How You Can To

    How Jim Rogers Saw 4,200% Returns In 10 Years & How You Can To

    • A person that achieves returns of 4,200% in 10 years should be listened to.
    • I’ll summarize Jim’s investing strategy into 15 rules. All of these rules are based on common sense, but are nevertheless very eye opening.
    • As for the contemporary environment, Jim is forecasting a crisis worse than 2008 due to higher debt levels. We’ll briefly discuss how to protect yourself.

    Introduction

    Jim Rogers is an out of the box guy. What he does is often regarded as crazy by mainstream investors. Nevertheless, as we are in a crazy macroeconomic environment with unsustainable low interest rates and debt levels, looking at so called “crazy” investment alternatives might not end up being all that crazy. More →

  • 13 Sep
    Why You Should Always Watch, But Not Always Listen To, Warren Buffett

    Why You Should Always Watch, But Not Always Listen To, Warren Buffett

    • There’s a difference between what Buffett says and what he does.
    • Perhaps he doesn’t do the dirty work, but he for sure has someone else do it for him.
    • I’ll discuss three famous quotes that can be seen from various perspectives.

    Introduction

    I often mention Warren Buffett and his valuable investing advice. However, not all that he says has to be blindly believed.

    In this article, I’m going to debunk some of his most famous statements by showing that he neither follows his own advice nor do some of his theories still hold in the current environment. More →

  • 07 Sep
    How To Become A Multimillionaire Without Sacrificing (Almost) Anything

    How To Become A Multimillionaire Without Sacrificing (Almost) Anything

    • Investing should be, firstly, easy. Just a few simple moves can make a big difference in your financial life.
    • I’ll discuss renting vs owning, investing for yourself or investing passively, and owning a ROTH IRA.
    • The sum of such easy-no-sacrifice action adds up to more than a few millions in a lifetime.

    Introduction

    You might be surprised by the title of today’s article as I usually discuss interesting macro and market correlations. However, I firmly believe that the best investments are those that are simple.

    We’re usually easily influenced by the media and the incredible amount of information out there, and we often forget about the simplest things one can do to reach extremely positive financial results. I’ll discuss a few steps one can take that will be the difference between ending up poor or ending up a multimillionaire and the funny thing is, those steps come with no or few sacrifices. More →

  • 06 Sep
    How Anchoring Can Destroy Your Returns

    How Anchoring Can Destroy Your Returns

    • You might not be aware of it, but you are under the influence of many things. After all, you are human.
    • Anchoring is really terrible as it makes you take profits too soon and keep your losers. We’ll discuss the post earnings drift effect, loss aversion, and the breakeven issue.
    • Additionally, we’ll discuss 5 ways to eliminate anchoring from your decision making process.

    Introduction

    We’re under the influence of the behavioral finance anchoring concept when we take a past reference point for determining whether a stock is a buy or not. More →

  • 05 Sep
    The Ratio To Watch For Double Digit Returns

    The Ratio To Watch For Double Digit Returns

    • In the long run, corporate performance is defined by economic activity.
    • The CAPE ratio is an excellent metric, but it has some limitations which we discuss.
    • According to this metric, stocks have been more expensive only once: during the peak week of the dot-com bubble.

    Introduction

    In the long run, there is no other way for stocks to go than to follow economic fundamentals.

    Economic activity is what defines corporate growth and earnings. In the short term, this can be skewed by euphoria that pushes stocks into overvalued territory or by pessimism that creates unbelievable bargains (just remember 2009).

    So how can you know when stocks are overvalued or undervalued? The most commonly used metric is the price to earnings ratio (P/E) ratio. However, the P/E ratio is very volatile and heavily under the influence of economic activity. More →

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