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.
THE BIG PICTURE. Investing is less about the stock price and more about the value of the business.
The Big Picture
Finding companies you know is only the beginning; the circle of competence is only meant to help you stay within your arena of expertise.
Once you have generated a list of the companies you understand, the next step should be conducting an analysis of the financials.
Don’t worry — you don’t have to be a finance whiz to understand the basics of the stock market.
For example, Berkshire Hathaway’s investment philosophy is surprisingly simple: The company should have 1. consistent earning power, 2. good return on equity, 3. capable management and 4. be sensibly priced. Investing is less about the stock price and more about the value of the business — is it a good one?
Successful investing is more about learning over time and slowly expanding your circle of competence. For now, stick with what you know and focus on the long term.
Anyone can find success in the stock market; you just have to keep it simple.
As Buffett has famously said, “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” And you know what? $60 billion says he’s right.