Bullbear Buffett Stock Investing Notes

Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.

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Saturday, July 24, 2010

Stock Market as a Whole

Posted by Investbullbear Investbullbear at 12:35 AM
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      • Petronas Dagangan (29.5.2012)
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      • Different styles of framing choices causes differe...
      • Should investors switch from bonds to shares?
      • SITUATIONS MATTER by Sam Sommers
      • BETTER BY MISTAKE: The Unexpected Benefits of Bein...
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      • Loss Aversion: The Shortsightedness of “Playing No...
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      • The power of conviction
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      • Buffett's and Shiller's stock valuation methods ag...
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      • The Value Equation
      • Warrant Price = Intrinsic Value + Time Value
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      • Tabulating Quarterly and Annual Financial Figures ...
      • Simple 10-Year DCF Valuation Model (Morningstar)
      • The longer you have to wait and the less certain y...
      • Intrinsic Value - What a stock is worth?
      • How to Calculate Margin of Safety in Stock Investi...
      • A brief history of behavioural finance
      • 5 Strategies For Earning Passive Income
      • Investing IN Retirement Is Different Than Investin...
      • FDI for Malaysia dropped 81% for the year 2009
      • Malaysians must be critical and analytical in thei...
      • Incredible Claims. Sadly, some Suckers will part w...
      • SC revokes SJ Asset Mgmt licence
      • Maybank sees solid deal flow, eyes new market
      • An idea known as SATISFICING
      • Hopefully, Integrity Triumphs
      • Wanted Very Badly: Malaysian Politicians with Int...
      • ****Desired Characteristics for Potential Investme...
      • Coca Cola Business at a Glance
      • The company’s intrinsic value is the net present v...
      • Free Cash Flow Yield trumps Dividends as a driver ...
      • How Most People Prioritize Payments
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      • Value Created by Free Cash Flow
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      • It is great to hear both sides of the stories.
      • Dow Theory - Market Phases
      • Thomson Medical Research: Defensive 3.5% Yield
      • The Dividend Play: High Growth vs. High Yield
      • Top 10 tricks used by Agents for misselling financ...
      • A discussion on Dividend
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      • Intro to REITs Investment
      • Rights Issue increases Shareholder Equity and dilu...
      • The Power of Increasing Dividends
      • Graphic representation of Cash Flows
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      • A look at a great dividend growth company JNJ
      • A Company with Favorable and Continued Dividend Gr...
      • Dividend Growth Investing: A Look at 10 Year Divi...
      • Dividend Growth Investing: Acquire Great Franchis...
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      • Biscuit and Sweets Counters in KLSE.
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      • A Visual Guide to the Financial Crisis
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      • Stock Picking Strategies of various Gurus
      • Analyzing Insurance Stocks: The Income Statement
      • Cash Flow Statement Classifications
      • AIG truly was too big to fail.
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      • Why Return on Equity Is Important
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      • The Phases of the Equity Cycle
      • The last decade has been very kind to investors th...
      • "Does the Bond Insurance/ Financial Guarantee Busi...
      • Confusing Investing with Trading
      • The Balance Sheet of "ME Inc."
      • Safety is a myth. Risk is reality.
      • "Buy stock in a company that's so good that an idi...
      • BRIC
      • According to Buffett, stocks are a logical investm...
      • Using Market P/E to determine the Value of the Sto...
      • Warren Buffett's Personal Stock Holdings (31.12.20...
      • Free cash flow yield trumps dividends as a driver ...
      • How Much Stock Dividend Did You Receive in 2009?
      • Unlike bond payments which are fixed, stock divide...
      • Dividend Growth Investing
      • The 1929 & 2007 Bear Market Race to The Bottom
      • Total Stock Returns = Fundamental Return + Specula...
      • Double Your Dividends by Investing in Foreign Comp...
      • Australian companies usually have high dividend pa...
      • 10 by 10: A New Way to Look at Yield and Dividend...
      • Global High Dividend Stocks Have Outperformed the ...
      • Dow Dividend Yield
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      • Retention Rate Is Important Factor For Dividend Gr...
      • The power of compounding from Reinvested Dividends...
      • Dividend Growers Have Outperformed with Less Risk
      • Carlsberg Financial Data (1998 to 2007)
      • Dividend Aristocrats: A Comprehensive View
      • More Gems from Buffett
      • The Principles of Dividend Investing
      • Relative Contributions of Price Returns and Divide...
      • The power of dividends is substantial, especially ...
      • The Sweet Spot of Dividend Investing
      • The DJIA Dividend Yield Points the Way
      • Stocks that pay dividends have done better histori...
      • Dividend Yield Investing
      • Stock Market vs. Dividend Yield
      • ****The power of dividends is pretty obvious!
      • Dividends for Top Bursa Malaysia Companies
      • The results of reinvesting dividends
      • S&P 500 Dividend Yield versus 10 Year Treasury Yie...
      • An Increasing Dividend, but Lower Dividend Yield?
      • Ex-dividend and cum-dividend explained
      • The single best strategy for investors – investing...
      • Investors interested in earning dividends should s...
      • I’ve never seen a company with such total dedicati...
      • Trend analysis of Company's Business Fundamentals
      • The Importance of Dividends
      • BYD's breakthrough growth got Buffett's attention
      • Dividend Growth Investing
      • The Most Powerful Force in the Universe
      • How to Invest: Growth vs. Value
      • Value Investor versus Speculative Investing
      • The Determinants of Market Price (Intelligent Inve...
      • Market Sentiment Curve
      • 5-Year Closing Price. Can this be predicted?
      • Three possible futures for the economy in this rec...
      • Characteristics of Value Stocks
      • Nouriel Roubini 2009 - Stock Market Calls
      • S&P 500 Index: Normalised PE Ratio
      • Dollar-cost averaging: The bear market solution in...
      • How not to lose money
      • Effects of the Economy on Household's Financial si...
      • A History of U.S. Home Values
      • Stock Market as a Whole
      • Annual 20-year returns for the UK stock market
      • Yen Carry Trade
      • Buy Low + Sell High = Big $$$
      • Volatility Play Investing
      • Short-Selling
      • Sell Urgently when the Fundamentals Deteriorated
      • Bull Market
      • Defenders of the Efficient Market Hypothesis
      • Portfolio Summary Template
      • Graphic of banks’ shrinking market caps
      • Oil Price (Inflation-Adjusted)
      • Japanese Debt to GDP
      • Country GDP as US States
      • Global Oil Consumption
      • Managing Sales Team
      • Financial Crisis - The Big Picture
      • When making decisions, managers should focus on in...
      • Why investors lose money in the Stock Market
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      • Yahoo Finance is the most visited finance site in ...
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      • Analysing the Quarterly Earnings
      • Nice way of depicting total shareholder returns
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      • Key Concepts behind the Analysis of Value Investin...
      • Apple's Growth Explosion
      • Margin of Safety Principle: Historical Stock Pric...
      • Preliminary Look at Thong Guan
      • Malaysia was well on track to become the fourth de...
      • Very Easy: To Buy, To Sell or To Hold - Just Throw...
      • SP500 from 1975 to 2007
      • DJIA during September 11, 2001
      • Technical Analysis
      • The Case against Goldman Sachs. John Paulson appr...
      • Bullish Long Red Candlestick Pattern Trading Guide...
      • What Would a Combined Microsoft-Yahoo Look Like?
      • A tale of two depressions
      • Apple Inc.
      • Tracking Insider Transactions
      • Why day trade when you can capture a few big moves...
      • Toyota
      • Baidu
      • Buffett's Tips for Individual Investors
      • Alligator Technical Indicator for Trending Markets...
      • Trailing Stops, Stopping Higher
      • Service availability and response time of the stoc...
      • When Stock Market Trading Volumes Thin
      • The Stock Market Ride
      • Winning risk:reward Ratio
      • The Estimated Ratio of the world GDP of 6 Major De...
      • Real Returns from Equities, Bonds and Bills (1900 ...
      • Stock, Investment, Money, Business Quotes & Saying...
      • The Importance of Sound Execution of Sound Strateg...
      • "Time in the Market" versus "Timing the Market"
      • A Different Way of Looking at Stock Prices
      • Bears That Won't Go Away
      • SHILLER’S PE RATIO
      • Criteria for Good Stock Picks
      • Four Bad Bear Markets
      • The 2008 Stock Market Crash
      • Making Sense of the U.S. Housing Slowdown
      • Dividend Growth Graph
      • Different investments offer different levels of po...
      • Typically a bull market will accelerate at the beg...
      • Keep an Eye on The Investment Clock
      • Can you beat this stock picker?
      • Be cyclically aware and responsive.
      • World Stock Market Capitalization
      • Relating PE to Stock Price
      • 25 Largest Stocks in the World
      • Defensive Portfolios
      • Bull Market Gains (1940 - Current)
      • Growing the worth of your Portfolio over the Long ...
      • Watch Out: The Cyclical Stocks Are Trading At An E...
      • Importance of Earnings Growth
      • Cyclicals versus Non-Cyclicals
      • The Value of Stock
      • Life Cycle of a Growth Stock
      • A comeback for value investing
      • Growth vs. value: annualized range of returns for ...
      • Sales Growth. We seek to grow sales organically by...
      • World Economies GDP per Capita
      • Core Value Equity - Security Selection Process
      • Protected, Secure, Balanced and Growth Funds.
      • Tabulating the Gain/Loss in Your Portfolio
      • Income Statement Format with EBIT and EBITDA
      • What to Invest?
      • Valuation Measures
      • Economic Cycle versus Stock Market Cycle
      • Cumulative Profit from Trading
      • An example of Asset Allocation of a Portfolio
      • Value Investing: Reward / Risk Ratio
      • Is it cheap enough? Is its balance sheet strong e...
      • Reversion Beyond the Mean: 20 Years Trailing P/Es...
      • Valuation Relative to Bond Market
      • Is Value Investing Dead? Not on Your Life!
      • Historical P/E of the S&P 500. Where Were the Val...
      • Value Investing is all about finding market ineffi...
      • A Decade of Investing in a Stock
      • The Reason for Investing Long Term
      • Tenets of Value Investing
      • Excess Returns by Decade for Undervalued and Overv...
      • Value Investors are Futurists
      • A stock you would love to have: Buy, Hold and Pro...
      • Crisis Events, DJIA Declines and Subsequent Perfor...
      • Average Daily Volume of DJIA over the Decades
      • How this investor continues to maintain a portfoli...
      • Relative USD Returns of US, Developed and Emerging...
      • PEG Ratio
      • PBB has been and is still a very rewarding stock.
      • Nestle is slow and sturdy in its performance
      • Dutch Lady climbs higher
      • PetDag continues to deliver
      • Value Investing versus Growth Investing: Know The ...
      • How to Limit Downside Risk when Investing
      • The debate between growth and value investing
      • British financier Anthony Ward behind £658m cocoa ...
      • UK: Are house prices set to fall again?
      • U.S. economy: From Recovery to Sustainable Growth...
      • High-Quality Stocks Could Take Market Lead
      • Finding Opportunities Amidst Volatile Markets
      • Seven Strategies For Investing During Volatile Mar...
      • Why this fund manager is among the best in this re...
      • A brief appraisal of Crest Builder Holdings Bhd. (...
      • Estimating an investment's value using DCF
      • Reasons to dislike excess cash on a company's bala...
      • 9 STEPS TO VALUE INVESTING.
      • When the market price of a stock tanks?
      • Three Bears: The past century's worst market slum...
      • DJIA 1937 - 1942: Lessons from the Great Depressi...
      • Equity Valuation (S&P 500) Relative to Bond Market...
      • What is Investing?
      • Investing Styles: Value, Growth and Momentum Inve...
      • Key Concepts Behind the Analysis of Value Investin...
      • Process is probably the most important part of Val...
      • The Life Cycle of a Mine and its Share Price
      • Interactions between Fundamental value, Market Sen...
      • Advantages and disadvantages of Value Investing
      • Important Speculative and Fundamental Factors dete...
      • The Importance of Earnings Growth
      • If it is a quality stock, why not BUY and HOLD lon...
      • The advantage of ability to short the market for s...
      • Investment Books worth their weight in Gold
      • The Firm in a Changing Economy
      • Reasons for Fund Overperformance
      • Characteristics of Value Stocks
      • Quality, Value and Management Approach (QVM approa...
      • What is Value Investing? (Graphic)
      • The Big Picture: Making Money in Range Bound Mark...
      • Buffett's Tips for Individual Investors
      • The World Market on 10.10.2008 (Lehman Panic Crisi...
      • Oil Price 1947 to May 2008
      • Bear Markets History (Graphic)
      • IMF Upgrades Malaysia’s Growth Forecast
      • AirAsia Ancillary Income To Grow
      • How to Not Ruin Your Portfolio
      • Investing in the Stock Market for the Individual I...
      • Buffett debunked the Efficient Market Hypothesis: ...
      • Singapore GDP expands at record pace
      • Most houseowners unaware of impact of interest rat...
      • Insightful Discussion on Portfolio Rebalancing, In...
      • Chuck out your CAPM and burst your beta, the truly...
      • Poll shows divided Malays & Malaysians
      • Be Fearful of the Market Manipulators
      • Understanding The Cash Conversion Cycle
      • THERE are many different types of investors. Here ...
      • Hard choices as China's boom fades
      • Time to be realistic about bank investments
      • Understand Your Risk Capacity and Risk Tolerance
      • A roof over our heads: Should we buy or rent?
      • Market psychology pays off
      • Breaking down your business plan
      • Fudging your revenue? Think again.
      • The Right Attitude to Value Investing
      • Well done South Africa for a wonderful World Cup T...
      • Public Bank launches PB Templeton BRIC
      • Public Mutual’s new Australian fund
      • ASM unitholders get 6.3 sen per unit
      • LPI top gainer on earnings growth, bonus issue pla...
      • LATEXX - CIMB Research maintains overweight on rub...
      • Latexx Partners on aggressive expansion plans (3.2...
      • What to do with a "tip"? Do not Ignore, however s...
      • The Illusion of International Small-Cap Investing
      • Training the Government towards a Good Governance
      • What is Your Company's Altman's Z Score?
      • What Is a Trade Deficit?
      • Understanding Value Traps
      • LPI Capital Records RM84.72 Million In Pre-Tax Pro...
      • Bursa Malaysia Reprimands Dealer Representative Fo...
      • Nazir: Retail investors moving offshore to expand ...
      • Bank Negara ups OPR by 25bps to 2.75%
      • Margin of safety
      • CIMB monitoring SJAM
      • Performance at a Glance: Petronas Dagangan
      • Why stay invested during market declines
      • OSK Research maintains TP of RM13 for Public Bank
      • Kuok's Wilmar International - More money was natur...
      • Biggest obstacle to Najib: The NEM's enemy within...
      • Good discussion on the chapters of Benjamin Graham...
      • UK House prices: is it time to buy or sell?
      • Double-dip fears as US recovery falters
      • Singapore Condo sold out in 1 day
      • To stop stock loss, neither a gambler nor a holder...
      • Bypassing Equity Funds, Wealthy Families Try Direc...
      • Acquiring "seed money" for investing
      • Market P/E as a guide to Market Valuation
      • Changing Investment World: Decoupling is set to b...
      • US to welcome best and brightest: Obama
      • Do not scoff at an Overall Rate of Return of 8% p....
      • The Rich Get Richer!
      • Black Swan events
      • IS THIS the beginning of a new market plunge? Pro...
      • Asset Allocation and Rebalancing
      • The Sentiment Curve of Investing
      • Who Is Participating In Forex Market Trades?
      • The Investment Secrets of Warren Buffett
      • Agricultural Bank of China launches world's bigges...
      • KLCI over the last 3 months to 17 Years (30.6.2010...
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Robert Kiyosaki: Rich Dad Poor Dad (Financial Education)

Robert Kiyosaki - Rich Dad Poor Dad

"7 Habits of Highly Effective People"


Undervalued Good Quality Stocks

  • Corporate Information
  • World Market Index
  • World Stock Exchanges
  • How can the average investor improves his investment returns in stocks?
  • Keeping Records of Your Shares (Download XLS Template)
  • Discovered any GEMS? Share here.

What is Risk?

The major RISK facing you is the possibility of not reaching your long-term investment goal through the growth of your funds in real terms. And the greatest enemy of reaching those goals is INFLATION. Nothing is safe from inflation. Short-term price volatility is NOT risk for investors who have time horizons 5, 10, 15 or 30 years away. Volatility is the friend of the long term investor. The most important friends of your investment goal are COMPOUNDING and TIME.

Life Cycle of A Successful Company

Life Cycle of A Successful Company

Tips from Warren Buffett

Tips from Warren Buffett

Visual Glossary of Corporate Finance

Visual Glossary of Corporate Finance

Value Investing

Value Investing
Intrinsic Value versus Market Price

Nine Steps to Value Investing

Nine Steps to Value Investing

Desired Characteristics for Potential Investment

Desired Characteristics for Potential Investment

The Famous Mr. Market Parable

The Famous Mr. Market Parable

Pros and Cons of Value Investing

Pros and Cons of Value Investing

Cash Flow Statement

Cash Flow Statement

Financial Ratios for Management, Owners and Lenders

Financial Ratios for Management, Owners and Lenders

My Philosophy and Strategy

My Investment Philosophy, Strategy and various Valuation Methods

My strategies for buying and selling (KISS version)

Investment Policies (Based on Benjamin Graham)


Knowing Yourself

  • Your Time Horizon, Risk Tolerance and Investment Objectives
  • What money means to you?
  • Everyone should become rich
  • Stock Market for the Young Investors

KLCI

KLCI

Keep INVESTING Simple and Safe (KISS)

  • Investment Policies (Based on Benjamin Graham)
  • My Investment Philosophy, Strategy and various Valuation Methods
  • Investment Philosophy of Magellan Infrastructure Fund
  • My strategies for buying and selling (KISS version)
  • The most important determinants of your success in investing - QVM
  • Eight lessons of investing
  • The Thought Process Is What Counts
  • Growing at 15% a year - what does this entail?
  • Taking Profit and Reducing Serious Loss
  • The Anxiety of Selling
  • The Ultimate Hold-versus-Sell Test
  • What to Do in a Up (Bull) Market?
  • What to Do in a Down (Bear) Market?
  • The 2008 bear market - Congratulations, you succeeded!
  • Lessons from the severe 2008 bear market
  • A challenge to active investors - Is it time for a re-think?
  • The Investor Psychology Cycle - The Sentiment Curve
  • The consequences must dominate the probabilities.
  • What you need to make to recover your losses
  • The Power of Compounding
  • Long term Buy and Hold works for Selected Stocks
  • Buy and hold until fundamentals change is safe for selected stocks.
  • Why Buy and Hold Will Always Be a Sound Investing Strategy
  • The Thoughts driving the Behaviour
  • Strategies for Overcoming Psychological Biases
  • Ride The Ten Baggers.
  • Financial Ratios for Managements, Owners and Lenders
  • News you could use - "SALE! 50% OFF!"

Other Strategies

  • Investment, speculation and gambling
  • Knowing the Stock Market and its Major Players
  • Keep your money for investing separate from those for speculating.
  • Be careful when playing momentum

since 21-12-2009

Counter 15.10.2010

About Me

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View my complete profile

Financial News

  • Berita Harian (Economy News)
  • Bernama
  • Bloomberg Businessweek
  • Bursa Malaysia
  • Channel News Asia
  • China Daily
  • Economy Watch: Economy, Investment & Finance Reports
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Benjamin Graham's 113 Wise Words

"The true investor scarcely ever is forced to sell his shares, and at all times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgement."

Philip Fisher's Wise Words

"The refusal to sell at a loss, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.

More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason. If to these actual losses are added the profits that might have been made through the proper reinvestment of these funds if such reinvestment had been made when the mistake was first realized, the cost of self-indulgence becomes truly tremendous."

(Common Stocks and Uncommon Profits)

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Term Life Insurance is Value for Money

All equity security investments present a risk of loss of capital

Investment performance is not guaranteed and future returns may differ from past returns. As investment conditions change over time, past returns should not be used to predict future returns. The results of your investing will be affected by a number of factors, including the performance of the investment markets in which you invest.

The Ultimate Hold-versus-Sell Test

Here is the overriding primary test, followed by observations on why it is so critically important:

Knowing all that you now know and expect about the company and its stock (not what you originally believed or hoped at time of purchase), and assuming that you had available capital, and assuming that it would not cause a portfolio imbalance to do so, would you buy this stock today, at today's price?

No equivocation. Yes or no?

Answers such as maybe or probably are not acceptable since they are ways of dodging the issue. No investor probably buys a stock; they either place an order or do not.

Here is the implication of your answer to that critical test: if you did not answer with a clear affirmative, you should sell; only if you said a strong yes, are you justified to hold.

Sell the losers, let the winners run.

Losers refer NOT to those stocks with the depressed prices but to those whose revenues and earnings aren't capable of growing adequately. Weed out these losers and reinvest the cash into other stocks with better revenues and earnings potential for higher returns.

Some thoughts on Analysing Stocks (KISS)

Ideally a stock you plan to purchase should have all of the following charateristics:

• A rising trend of earnings dividends and book value per share.
• A balance sheet with less debt than other companies in its particular industry.
• A P/E ratio no higher than average.
• A dividend yield that suits your particular needs.
• A below-average dividend pay-out ratio.
• A history of earnings and dividends not pockmarked by erratic ups and downs.
• Companies whose ROE is 15 or better.
• A ratio of price to cash flow (P/CF) that is not too high when compared to other stocks in the same industry.

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Margin of Safety Concept: Stocks should be bought like groceries, not like perfume

The high CAGR in the early years of the investing period, due to buying at a discount, tended to decline and approach that of the intrinsic EPS GR of the companies over a longer investment time-frame.

Chapter 20 - “Margin of Safety” as the Central Concept of Investment

A single quote by Graham on page 516 struck me:

Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

Basically, Graham is saying that most stock investors lose money because they invest in companies that seem good at a particular point in time, but are lacking the fundamentals of a long-lasting stable company.

This seems obvious on the surface, but it’s actually a great argument for thinking more carefully about your individual stock investments. If most of your losses come from buying companies that seem healthy but really aren’t, isn’t that a profound argument for carefully studying any company you might invest in?

Market Fluctuations of Investor's Portfolio

Note carefully what Graham is saying here.

It is not just possible, but probable, that most of the stocks you own will gain at least 50% from their lowest price and lose at least 33% ("equivalent one-third") from their highest price -regardless of which stocks you own or whether the market as a whole goes up or down.

If you can't live with that - or you think your portfolio is somehow magically exempt from it - then you are not yet entitled to call yourself an investor.

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Keep It Simple and Safe (KISS)

Successful investing is not magic, just keep things simple and maybe follow few investing and money rules of thumb and you’ll be fine in the long run.
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