Value Investing podcast covers knowledge and discipline that you need to bring financial success to your life. In terms of knowledge, this podcast will deliver wisdom from legendary investors such as Warren Buffett and Peter Lynch and in terms of discipline, this podcast will train you to be a wise and long term investor.
We continue to talk about the remaining 7 points (out of 15 points) that Philip Fisher checks when buying a company. The content of this episode was from his book (Common Stocks and Uncommon Profits: https://amzn.to/2QRM7mR)
Does the company have depth to its management?
How good are the company’s cost analysis and accounting controls?
Are the other aspects of the business, somewhat peculiar to the industry involved, which will give the investor important clues as to how outstanding the company may be in relation to its competition?
Does the company have a short-range or long-range outlook in regard to profits?
In the foreseeable future will the growth of the company require sufficient equity financing so that the larger number of shares then outstanding will largely cancel the existing stockholders’ benefit from this anticipated growth?
Does the management talk freely to investors about its affairs when things are going well but “clam up” when troubles and disappointments occur?
Does the company have a management of unquestionable integrity?
This episode covers the first 8 points (out of 15 points) that Philip Fisher checks when buying a company. The content of this episode was from his book (Common Stocks and Uncommon Profits: https://amzn.to/2QRM7mR)
Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years?
Does the management have a determination to continue to develop products or processes that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited?
How effective are the company’s research and development efforts in relation to its size?
Does the company have an above-average sales organization?
Does the company have a worthwhile profit margin?
What is the company doing to maintain or improve profit margins?
Does the company have outstanding labor and personnel relations?
Does the company have outstanding executive relations?
This episode covers how Peter Lynch utilized Master Limited Partnership (MLP) investment opportunities in the stock market. The content of this episode was from his book (Beating the Street: https://amzn.to/2yklmzj)
We continue to talk about the investing rules by Peter Lynch and this episode covers the following 8 rules.
There is always something to worry about. Avoid weekend thinking and ignore the latest dire predictions of the newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling.
Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.
If you study 10 companies, you’ll find 1 for which the story is better than expected. If you study 50, you’ll find 5. There are always pleasant surprises to be found in the stock market – companies whose achievements are being overlooked on Wall Street.
If you don’t study any companies, you’ll have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Time is on your side when you own shares of superior companies. You can afford to be patient – even if you missed Wal-Mart in the first five years, it was a great stock to own in the next five years. Time is against you when you own options.
If you have the stomach for stocks, but neither the time nor the inclination to do the homework, invest in equity mutual funds. Here, it’s a good idea to diversify. You should own a few different kinds of funds, with managers who pursue different styles of investing: growth, value, small companies, large companies, etc. Investing in six of the same kind of fund is not diversification. The capital gains tax penalizes investors who do too much switching from one mutual fund to another. If you’ve invested in one fund or several funds that have done well, don’t abandon them capriciously. Stick with them.
Among the major markets of the world, the U.S. market ranks eighth in total return over the past decade. You can take advantage of the faster-growing economies by investing some of your assets in an overseas fund with a good record.
In the long run, a portfolio of well-chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money-market account. In the long run, a portfolio of poorly chosen stocks won’t outperform the money left under the mattress.
This episode covers the first 9 investing rules by Peter Lynch
Investing is fun, exciting, and dangerous if you don’t do any work.
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 three decades, the stock market has come to be dominated by a herd of professional investors. Contrary to popular belief, this makes it easier for the amateur investor. You can beat the market by ignoring the herd.
Behind every stock is a company, find out what it’s doing.
Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its 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 cinch to go up!” doesn’t count.
Long shots almost always miss the mark.
Owning stocks is like having children – don’t get involved with more than you can handle. The part-time stock picker probably has time to follow 8-12 companies, and to buy and sell shares as conditions warrant. There don’t have to be more than 5 companies in the portfolio at any time.
If you can’t find any companies that you think are attractive, put your money into the bank until you discover some.