What do you need to beat the market?
You need to pick stocks of companies that have a higher mathematical expectancy than that of the market, example, the S&P 500.
Of course, this could come in many forms, for example:
- a higher earnings yield (low PE),
- better growth prospects (high EPS growth rate),
- higher certainty in the company’s future prospects (good quality business and management), or
- a cheaper stock price in relation to the business’s underlying assets (undervalued stock).
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