Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets.
People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.
Big companies have small moves, small companies have big moves.
Remember, things are never clear until it’s too late.
It takes remarkable patience to hold on to a stock in a company that excites you, but which everybody else seems to ignore. You begin to think everybody else is right and you are wrong. But where the fundamentals are promising, patience is often rewarded – Lukens stock went up sixfold in the fifteenth year, American Greetings was a sixbagger in six years, Angelica a sevenbagger in four, Brunswick a sixbagger in five, and SmithKline a threebagger in two.
The secret of his success is that he never went to business school. Imagina all the lessons he never had to unlearn.
A person who owns property and has a stake in the enterprise is likely to work harder and feel happier and do a better job than a person who doesn.
Primes are the atoms of the number system: every whole number is a product of primes.
This is one of the keys to successful investing: focus on the companies, not on the stocks.
When looking at the same sky, people in mature industries see clouds where people in immature industries see pie.
If my favorite Internet company sells for $30 a share, and yours sells for $10, then people who focus on price would say that mine is the superior company. This is a dangerous delusion. What Mr. Market pays for a stock today or next week doesn’t tell you which company has the best chance to succeed two to three years down the information superhighway.
Stocks you trade, it’s wives you’re stuck with.
Find something you enjoy doing and give it everything you’ve got, and the money will take care of itself.
Investing without research is like playing stud poker and never looking at the cards. For some reason the whole business.
Ultimately it is not the stock market nor even the companies themselves that determine an investor’s fate. It is the investor.
While catching up on the news is merely depressing to the citizen who has no stocks, it is a dangerous habit for the investor.
In stage four, once again they’re crowded around me – but this time it’s to tell me what stocks I should buy. Even the dentist has three or four tips, and in the next few days I look up his recommendations in the newspaper and they’ve all gone up. When the neighbors tell me what to buy and then I wish I had taken their advice, it’s a sure sign that the market has reached a top and is due for a tumble.
A technique that works repeatedly is to wait until the prevailing opinion about a certain industry is that things have gone from bad to worse, and then buy shares in the strongest companies in the group.
I’m always on the lookout for great companies in lousy industries. A great industry that’s growing fast, such as computers or medical technology, attracts too much attention and too many competitors.
My diaries are full of such missed opportunities, but the stock market is merciful – it always gives the nincompoop a second chance.
The best way to handle a situation in which you love the company but not the current price is to make a small commitment and then increase it in the next sell-off.