I think it is easier to figure out what not to buy than what to buy. If we can weed out the stocks to avoid, we’ll be a step closer to figure out what to buy. What are some stocks you should avoid? Generally, hot stocks that everyone is talking about. Some are ‘momentum’ stocks […]
Hunting Groundhʌntɪŋ ɡraʊnd/nouna place likely to be a fruitful source of something desired or sought. Imagine if you’re going on a fishing trip, what do you need? You need a location, fishing rods, reels, lures, etc. That’s the plan. But a plan doesn’t equal success. You might catch some fish if you’re lucky, but you’re […]
In my previous post, I wrote that to achieve outperformance or above-average returns, your investment process has to be ‘unconventional’ compared to the majority. And that can only be achieved through originality, independent or contrarian thinking, and making connections from disparate information. Bill Miller, the former Legg Mason portfolio manager, emphasizes the importance of making […]
1. Experience may not be a good teacher Most elderly who died in Hurricane Katrina dies not because of their health, but because of confidence and denial. They have survived several hurricanes over their lifetime, so they believe Hurricane Katrina is no exception. Experience can create a close attitude that prevents us from seeing things […]
Price to Earnings ratio is the most widely used tool to gauge the attractiveness of a stock. But it is important to know the limitation of PE ratio so we don’t fall for the “everything looks like a nail to a man with a hammer” illusion. Here are a few things to understand. Confuse between […]
“Buy things that you understand”, “Stick to what you know”, or “Stay within your circle of competence” – We hear these advises all the time so we don’t invest in stocks we know little about. But what define understanding? How do we know if we truly understand a business? If I know Apple designs, develops, […]