Compound interest is the most powerful force in the universe. – Albert Einstein Is it really? Let’s dissect it. Compound Interest is earning interest on interest in addition to just principle. Therefore, it is a great way to accumulate your wealth. What are the rules of compounding? There are four components of compounding. They are. […]
“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”― Albert Einstein Benjamin Graham had spent his life establishing his basic criterion for buying and selling stocks. In a nutshell, his rules for selling stocks are: 1. Sell after your stock has gone up 50 percent; or 2. Sell […]
There’s no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or worse, to buy more of it when the fundamentals are deteriorating. -Peter Lynch- This is a story of a Trader that turned into Investor (or that is what we prefer to be […]
Let’s hear it straight from the horse’s mouth! Here is an abstract of an interview with Warren Buffett. Reporter: “…when I spoke with [Warren Buffett] last fall in his office in Omaha, he very characteristically made his investment style seems so perfectly simple.” Warren Buffett: The first rule on investment is – don’t lose and […]
There are two times in a man’s life when he should not speculate: when he can’t afford it, and when he can. – Mark Twain. The most important investment decision you will probably ever make concerns the balancing of asset categories (stocks, bonds, real estate, money-market securities, and so on) at different stage of your […]
A lot of value investors highlight the importance of ignoring macroeconomics and adhering the concept of intrinsic value of businesses while making stock investments. Based on this, we have formulated a discipline to ignore macro noises and focus on the margin of safety and valuation. “Forming macro opinions or listening to the macro or market […]
Buying a piece of a company and holding it for more than a year has quite a few advantages. The advantages are not only monetary but also psychological. First two (below) are monetary advantages and the bottom two are psychological advantages. The first two advantages are of prime importance to retail investors at the beginning. […]
What you did in 1999-2001, or 2008-2009 is more important than what you did in 2002-2007 and 2010-2019 combined. The majority of your lifetime investment returns will be determined by decisions that take place during a small minority of the time. More so, how are you prepared for the worst time is more important than […]
As the continuation of our earlier post (Part One), we are going to briefly discuss the second characteristics of every historical successful investment (based on our research). Small market capitalization is the second common characteristics of successful investment after the price paid for assets. Small Market Capitalization Wonderful business bought when they are small will […]
Here is an amazing read about investing philosophy by our guest writer, Manish Jauhari. He is a great source of wisdom. I think Investing is part art and part science. Art Aspect of Investing The topics that I consider in the Art part of Investing are. What business the company is in? What is the […]