The beginning investor should spend the first year with investment market, just as most of the top athletes are preparing before each performance. Graham recommends spending at least a year on selected and monitored developments only vaguely, without any real money investment.
Suite, suite, suite
Max Heine, founder of Mutual Series Funds, often said that “there are a lot of trips to Jerusalem”. This master investor had in mind that his value-based stock selection method was not the only way to achieve an investment rush. In this chapter, we will look at a few techniques that some of the most important management of mutual funds use to select an event today.
First of all, we must repeat that for most individual investors, the selection of individual actions due to overwork is unsuitable. The vast majority of people who try to choose stocks individually will eventually find out that they are not as long as they originally thought; The three of them will find out for you, the longer it will take me years. A small percentage of investors have a lot to do with their own selection of events.
In the series of books from the book of the most important investment advisor of the 20th century, learn from the most dedicated “investment guru” how to avoid these mistakes as an investor, broker or investment advisor and how to implement long-term investment strategies.
Graham recommended that early investors invest in the market, just as most of the top athletes or musicians prepare before any performance or performance. Graham recommends spending at least a year selecting and following your development (but only uncertainly, without any real money investment).
In Graham’s time, you would practice reading a book of hypothetical purchases and paper sales; Today you can use so-called portfolio trackers (programs that monitor portfolio results), they are available on websites such as www.morningstar.com, http://finance.yahoo.com, http://money.cnn.com/ services / portfolio or www.marketocracy. com (on the last link ignore their bombastic advertisement about how in their funds, or their services will help “beat the market”).
By performing your investment techniques in test drives, two of them put them into sharp operation with real pensions, you can make mistakes or suffer a real loss, build discipline for limited frequent trading, compare your own investment approaches with those that use the previous manaei investinch fund (called money managers) and find out what works in your case. But the best part is that as you monitor the performance of your individual stocks, you will never forget that some of the hypothetical purchases, which you considered to be a great investment, will eventually turn out to be lousy.
It vs donut to be used by vtz and poraench. After a year, measure your hypothetical investment results with what you would achieve if you put your funds in the S&P 500 index (fund). If you invest in individual actions, pay to other volunteers. Invest in an index fund and don’t waste time with a selected stock.
Look under the right stones
So how should you approach potential local stocks? First you can on internet sites such as e.g. http://finance.yahoo.com and www.morningstar. com, filter the stock market. Or you can embark on a patient, dark art process. Unlike most people, many of the best professional investors are interested primarily in stocks, their price has fallen, not raised. Christopher Browne of the Tweedy Browne Global Value Fund, William Nygren of the Oakmark Fund, Robert Rodriguez of the FPA Capital Fund and Robert Torray of the Torray Fund recommend following daily event listings, the bottom of the last 52 weeks.
“The Smart Investor” is by far the best book ever written about investing. It is one of the thinnest publications of its kind, but so paradoxically perhaps most ignored in practice. Such is human nature. We just want to put everything together.
These overviews can be found in the Wall Street Journal, a similar table appears in the Barrons periodical in Market Week. This will lead to companies and industries, they are not very popular and loved, and promise potentially high returns as soon as their perceptions change.
Christopher Davis of Davis Funds and William Miller of Legg Mason Value Trust see the company’s growing return on invested capital (ROIC), an indicator that only helps how effectively the company generates what Warren Buffett called “property gains.” .
The control of the so-called comparable prices (comparables), ie prices for which similar companies have been taken over in recent years, are manaei, such as Nygren of Oakmark or O. Mason Hawkins of Longleaf Partners are able to gain a better insight into the value of each diversified company. For the individual investor, this is tedious and difficult work. First, take a look at the Business Segments section, which lists the industries, sales, and profits of each company (subsidiary). (See also the section Management Discussion and Analysis, ie management first.)
Then look in the databases, such as. Factiva, ProQuest or LexisNexis, where you will find examples of other companies in the given industries, have recently been the subject of acquisitions. With the help of the EDGAR database at www.sec.gov you will get to their first and first and you will be able to determine the sales price-to-profit ratio of these pebranch companies. You may need to change the ratio when estimating how much a potential buyer would be willing to pay for a similar company you first examine.
By gradually evaluating each division in this way, you will become aware of whether their price is not the current market price of the event. Hawkins from Longleaf considers it good to look for so-called 60 percent dollars (as it is called), that is, the company is trading at 60% of the value, which he would appreciate. This approach will help create the margin of safety that Graham insists on.
The purpose of this revised edition of The Smart Investor is to apply Graham’s ideas to the conditions of the current financial market, and still leave its original text intact (with the exception of notes under the explanatory note). Each Graham chapter is followed by a commentary. In these original shadows after the original text, there are also current examples, on which it is best to observe how current and how liberating remain Graham’s principles even today.
from the book: The Intelligent Investor
1. dl: Even a cautious investor will make time for it
ryvek is from the book
vydan publishing houseCity Publishing,
vce information can be found at www.grada.cz