Making the Value Judgement in Practice
It is important to have a practical, simplified model for picking out value investments.
The goal is to boil the selection process down to something that could be handled in a half an hour or less per company.
One wouldn't commit $10 million in capital to a company based on this analysis, but it provides grounds for making small investments or pursuing further research.
At the end of the drill, you should, as Peter Lynch suggests, be able to tell the story of a stock to family, friends and favourite pets. And most of all, to be able to understand, yourself, why you like or don't like a business as an investment.
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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