- Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.
- Over the past 3 decades, the stock mkt has come to be dominated by by a herd of professional investors. Contrary to popular belief, this makes it easier for the amateur investor. You can beet the market by ignoring the herd.
- Often there is no correlation b/w success of a company’s operations and the success of its stock over a few months or even years. In the long term there is 100% correlation b/w the success of the company and the success of the stock. This disparity is the key to making money: it pays to be patient, and to own successful companies.
- You have to know what you own, and why you own it. “This baby is a clinch to go up!” dosen’t count.
- Long shots almost always miss the mark Continue reading “The Peter Lynch golden rules :”
Europe, Japan and America are printing money at an extraordinary rate. It has reduced the cost of debt to negligible levels. Usually this is explained with reference to what is happening in the conventional economy, but I suspect there may be another explanation. The systemic effects of the bizarre financial system that we have created, which is based on leverage. That leverage, which is thought of as debt, is not really what we mean by debt.
Guest post by : Green
The ability to understand and manipulate economic markets for financial gain is a skill that has been watered down over
the years. It seems these days that almost everyone thinks they are an expert in stock and shares, Forex or commodities. The big crash of 2008 and the ensuing volatility in a number of key markets have been refreshing in so much as it really separated the masters from the mice in market trading.
Those who have managed to continue to make money during these hard times are the quintessential trend spotters. However in this case they are not so much spotting an individual trend, more the changing methods of how to invest in the stock market. Continue reading “A Recession Doesn’t Put Everything in Decline”
John C. Bogle the renowned name in the mutual funds shared some thoughts long back saying Whatever the form of the EMH, I know of no serious academic, professional money manager, trained security analyst, or intelligent individual investor who would disagree with the thrust of EMH: The stock market itself is a demanding taskmaster. It sets a high hurdle that few investors can leap.
University of Chicago Professor Eugene F. Fama had performed enough analysis of the ever-increasing volume of stock price data to validate this “random walk” hypothesis, rechristened as the efficient market hypothesis (EMH). Today, the intellectual arguments against the EMH religion are few. The church, however, has three different dogmas. Princeton Professor Burton Malkiel describes them: the weak form (stock price changes over time are statistically independent); the semi-strong form (prices quickly reflect new value-changing information); and the strong form (professional managers are unable to accurately forecast the future prices of individual stocks). Continue reading “Cost Matter in all forms of Efficient Markets”
It’s not mandatory that all good investors are good writers and visa viz that all good finance writers are good investors. It’s the experience of the people who is good or bad that counts. Here again some of the best remarks from Peter Lynch :
- When the operas outnumber the football games three to zero, you know there is something wrong with your life.
- Gentleman who prefers bonds don’t know what they are missing.
- Never invest in any idea you can’t illustrate with a crayon.
- You can’t see the future through a rear view mirror
- There’s no point paying Yo-Yo Ma to play a radio.
- As long as you’re picking a fund, you might as well pick a good one. Continue reading “Investing thoughts from Peter Lynch”