There are lots of guys who practice value investing, and many who
look at stocks as businesses, yet few have market beating returns over a long period.
There are strategies to take advantage of each stage of the market cycle that can be applied just by
looking at a stock chart.
The portfolio is assembled
by looking at stocks with low P / E and P / CF ratios, whose underlying firms have strong balance sheets and good management.
Though I rarely try to
look at stocks from the capitalization (size) perspective, the large capitalization stocks, I believe, present a unique buying opportunity.
The reason why we do
n't look at stock allocations of higher than 100 percent is that we consider such stock allocations to be too risky.
When an
investor looks at a stock, or the market, they should treat the general consensus (in fact, all conventional thinking) with suspicion.
The point being that focusing on fundamentals, all fundamentals, provides more insight than
simply looking at stock price movements.
While
people look at stock market crash as something that is entirely bad, I will like us to look at it from a different angle.
We're
looking at a stock where there's a big potential disconnect between the price it's selling for and its intrinsic fair value.
Rather than focusing on current yield, the ETF
instead looks at stocks that have a past history of dividend growth over time.
Go look at a stock chart for a total market fund and tell me if that ride doesn't look a little bit bumpy.
Recently, my wife was
looking at her stock purchase plan account and was pleasantly surprised to find that she had just over $ 10,000 in the account.
I also don't buy or
even look at stocks or funds that don't pay dividends, I want to be paid for waiting!
One of the key principles pointed out was, before investing in a stock, one should always
look at stocks as «parts of businesses».
As always, I think one should
look at stocks on an individual basis instead of trying to judge the entire market at any given time.
By looking at a stock's earnings per share over a period of several months or years, you can see how the company has grown.
My interpretation of value investing is much more than
simply looking at a stock's quantitative value, underlying fundamentals and financial position.
While
people look at stock market crash as something that is entirely bad, I will like us to look at it from a different angle.
Also, momentum strategies usually do
not look at a stock's business, industry, competitiveness, etc. which would take more time to analyze.
If the reasons that you bought a stock still apply, the you may want to consider buying more since you are getting a better price than when you
first looked at the stock.
It's worth taking a
closer look at stocks, because historically, they've had much better returns than bonds and other investments.