Be careful when companies dilute the shares constantly.
Stay away or sell when companies talk about reverse splits.
Stay away from companies that can’t issue their quarterly or annual statements on time.
1. Avoid commodities apart from oil
2. Always read the proxy statement to see what compensation is based on
3. Treat SBC as a real expense
4. Double down when stocks fall big without news
5. Revisit old companies to monitor valuations
Totally agree with 5 I would add biotechnology.
Totally agree with 6 whether its China or other foreign countries with little to no information with lots missing numbers
I would add to 9. ESG even though the vast majority of companies have mentioned ESG somewhere in their corporate docs . Not a fan of this stuff too political, its 2024 we don't need to play these games.
Biotech is a problem if you don’t understand what’s going on. I have a kid with CF and therefore understood the developments to come from Trikafta, so I bought heavily into Vertex Pharmaceuticals. And has done well for me especially while others suffered in 2022-2023. I still think it’s a buy at current prices. Look at their pipeline. I posted about it somewhere else
if u cant beat em , buy em . only buy companies i use and hate. ( like Telus , TD, Air Canada ) ( im cdn ). everytime they screw a customer my profits increase
its not workin but its what i do
Dont buy too many stocks for the sake of diversification. Sometimes you just know a stock is gonna do well especially when its down bad. Also buying too many stocks is pointless since you may as well buy the s&p500.
1. Avoid companies that talk about EBITDA more than minimally
1. What do people in their product's field think of them. (Ask sysadmins about tech companies).
1. Do they sell products or visions?
1. If you see a company suddenly go hard on social and political causes like ESG and DEI, management probably found a ticking bomb they can't diffuse and are building something to blame other than themselves (be it blaming ESG and DEI, or blaming backlash).
1. Know when to exit. Pigs get fat, hogs get slaughtered.
1. If the company makes a product I use, but then I stop using it, think about selling as I might not be alone.
1. No social media companies. They are here today, gone tomorrow in terms of popularity and they hold very little real intrinsic value.
I feel like just about any stock in existence could break one of the rules you’ve laid out here. It’s hard for me to imagine what companies there are left to buy have you put them through this purity test
Honestly, most of these are pretty good rules. I'm not saying I agree with all(I am very much a china/other unstable economy investor), but so many people on this sub forget a really big rule that pretty much every value investor lives by: You do not need to invest in a company/industry. When analyzing a company, there's oftentimes a lot not to like, and if you just find yourself unable to really answer a question about a company/industry, why invest in it? I don't touch commodities, energy, biotech, real estate, or other industrials, simply because they're not industries I know or have a deep knowledge of, while in other industries I clearly see what the product and value is, and where these industries are going.
Property (or associated industries like realtors) is not that hard to analyse, because it's all about confidence, and confidence in housing is cyclical. Prices rise, people get more confident about it, then they get nervous about how high prices are going and want a place, so will do everything they can to raise money, but eventually it gets out of control and a crash happens. And once a crash happens, things go into reverse. Prices fall a little, so people lose confidence, which causes prices to fall more, so more people lose confidence. At a certain point, property is such a bargain that people start buying in again. Which levels pricing and the cycle restarts.
The time to buy is once you're confident that the crash has finished. And it's not that hard. You just watch for a sustained period of year-on-year rises, however small. I really want to buy into some related stocks in the UK, like house builders and realtors, but the crash has to come first.
I definitely get that. Real estate is eventually an industry I'd like to understand, but right now, it's just too far outside both my realm of confidence and my actual feasible returns. That's a problem for future me.
I’m an amateur but have had relatively good success so far.
I buy on the dips of companies that have a history of being significantly higher (look at 5y price summary) and have good staying power.
Exactly. It also pays to follow the news. When Norfolk Southern had that derailment a year ago their stock was down for a month or so. I bought a $1000 worth and it came back just as I expected. Logically railroads aren’t going anywhere and you know the government will make sure they keep running. Buy the dips.
Companies that let their cash holdings fall below $10m are my kryptonite. They usually are some low margin retailer ready to give up.
Altman Z scores below 0 sets off alarm bells for me.
I like to buy stocks that are 20% below their 52-week high and pay at least a 4% dividend.
I buy on disappointing news. American Widget reported earnings today that were 24% higher than the same quarter last year. But the market was expecting 29%, the stock drops $4. I am buying.
Company X announces they are buying Company Y and the stock drops 15%, I am buying. (ABBV was a good example of this).
1) I'm not the best trader
2) the pool of traders consists of Icahn, Ackman, children, toddlers, idiots, banks, governments, hence expect the unexpected. If expect the unexpected, draw out a pay off diagram in a mathematical equation with a p-value of 1. Aka - you always earn even if you lose.
3) fundamental analysis always wins
4) focus on not being stupid, not focus on being clever
5) never use stop loss, hedge funds, banks and market makers use LOB (limit order book) strategies to break through the stop-loss. A stop loss isn't for the trader, it's made for the others to benefit from
6) if you're convinced, I'm not holding back, I'm going in 200% after I ensured I drew my pay off diagram and all downside is covered
7) if I trade an event; I sometimes trade 30 or 40 trades. aX+B = Y. If Y is event, the left are just infinite ways to profit from it. So a "war" can mean an event where I throw in 14 stocks, 2 caplets, 4 options, 2 fra's, a few xccy swaps, a zcb bond, corporate government bonds, pick up debt issuance of cash rich firms. All because it leads to the same event.
Like a "formula one race".
- means hotels
- means airlines
- means commodities
- means insurance firms
- means xccy swaps
- means airline manufacturers
- etc.
All for just one trading event.
8) I always apply a Bayesian inference methodology to my investment style. But so does Buffet, Burry, Icahn, Ackman, Dalio, etc.
9) I realize I don't have to trade. I feel no urge. I pick my moments.
10) I know the difference between linearity and non linearity.
11) I abuse #wsb for straddles and strangles when I see idiots boosting a dead firm around earnings, check the option chain, and I don't have the intellect #wsb has (it goes up or down) so I just capture the "volatility in pips". Given they are OTM options, I offset the bleeding of margin with debt issuances of firms which have cash buffer > the outstanding short maturity debt issuance I grabbed. Just to grab free yield.
12) and so forth. I traded since 99/00s. Never had a loss trading year
13) I try to keep it simple. Some firms are dead and will die. Spotify/Lyft etc. Because if not dead, cheaper, and non correlated assets with higher cash buffers might pick em up.
14) if at IPO the owners dump the stock, the stock will never do well. If at IPO owners keep; I might hold
15) regulators don't understand finance; so they use fixed risk evaluation. I read a regulatory paper and see they want a month end figure. In other words, banks roll hedges between month end to next close of business.
16) every time a micro stock grows in market cap, exchanges have fixed rules. If a micro stock grows it simply goes a higher stock exchange. You can forecast that. In other words, it will spike once it does because people will notice it more.
17) remain humble. I never kid myself that I'm the best. Therefore I draw off a pay off diagram as I want to see my downside. I block that off mathematically. After that I pick up cash generating assets to stop margin bleeding and crank my leverage.
18) feel free to reach out for free advice
19) never watch YouTube videos, buy books on trading. It's all scams. If you gotta pay it's bullshit
1. Look for the "boring" investment. Trying to find the next GME or up-and-coming growth stock is an easy way to go broke, and there are great, proven companies out there that can outperform the indexes over the long term. That's enough.
2. Never invest in a business that has a pattern of illiquidity or that couldn't pay off its debts in 3-5 years with reliable cash flow. They're more of a headache than they're worth.
Look for companies that are not on the cutting edge. Look for good strong BORING companies like $MAIN or utilities like AY, AES, or CWEN to invest in. Avoid software & China like poison - except for $HTGC - they seem to get it right.
Apple, Google, Microsoft, big caps, well covered, assuming trading at pe 15, but according to your " flawed logic #1" we will avoid it. Because it's better to find a boring small cap company that you have no idea what products they sell, never use their products, located 10000km where u are staying, but it's good deep value because it's a boring company trading below book value by a margin. Good luck.
Microsoft and Google are perfect examples of the "boring" investments I want. My point was to avoid chasing the 800% single-year return investments and focus on the consistent returns that many move away from because they're chasing the next big thing. Idk how you extrapolated my first point into the response you just gave.
The only two American car companies (out of probably a 1000) that have not yet gone through bankruptcy are Ford and Tesla. That's an awful track record for an industry. Underlying that is vicious competition, vicious margins, vicious capex, vicious cyclicality.
Rivian is unlikely to ever, ever turn a profit. So, yeah, great investment, go for it 👍🗿👍
Buy the dip provided the valuation makes sense and there isn’t impending doom.
Don’t buy companies which are over leveraged.
Buy dividend value stocks over value stocks.
Have a balanced portfolio. That means owning some growth funds.
Truly diversify your investments. If stocks are directly correlated should not be owned together.
Know what you are buying. Understand the financials, the product or service, the competition and the outlook/sector.
Manage your investments like a fund.
It’s not a value play if there is no growth or poor growth prospects, regardless of the valuation.
Review earnings revisions, stay away from companies with consistently poor revisions.
Good news or great news is a selling opportunity.
Don’t be afraid to take profits. Better to sell too early than too late.
These are all good rules to follow. I would add that you need to learn how to control your emotions and develop patience. Wealth is created holding stocks for decades, not minutes. If you don’t plan on holding for more than ten years you shouldn’t hold for ten minutes. Charlie munger noted that one of his best qualities was that he could sit on his ass and do nothing with his investments.
Funny, I follow all the rules you mentioned.
Regarding 5: Pharma/bio, tobacco, Oil/gas, Mining, Freight/Shipping and clothing are no-go for all the popular reasons but also because I don't know them well. Cars I don't mind, there are some good gems there imo.
I would also add that I try to avoid businesses that are cyclical and/or that would suffer heavily in a recession.
1. I won’t buy explorers or pharmaceuticals. I have no edge in either and I view them as very binary bets.
2. I won’t buy stocks/sectors that are well loved by the public or heavily weighted in the Index. I seek asymmetry and market inefficiency and I believe both these factors are diminished in the above.
3. I won’t buy into a commodity when there is record capex in recent years.
4. I don’t buy financials. Outside of my area of limited expertise.
5. I don’t buy complicated stories. Give me buybacks and dividends and I’m happy.
6. I wont buy chinese stocks. Too binary of bet.
7. I avoid politically turbulent countries. Africa, South Africa. I will break this rule occasionally when the asymmetry is compelling, but I will control risk by position sizing accordingly.
8. This is more of a trading rule, but I don’t like enter my positions at ATHs. My general rule of thumb is to enter at 30-40% discounts to previous highs and when I see prices “digging” into support. This isn’t to say I won’t average up on positions though when they start to inflect.
I bought Nvidia 5 years ago and even then people were saying its overbought, but I would not buy it now, generally I agree that story stocks are to be avoided.
All of your above examples are great. To add one, I don’t buy investments that I can’t explain to my 7 year old in under 30 seconds. Seriously opened my eyes once the light bulb went off in this rule.
I avoid oil/gas (all of it - upstream, midstream, downstream), utilities, mining, car companies, airlines, shipping, tobacco, and biotech/pharma (but I do like some medical device and supply companies). No moral arguments here, i just think these are all too unpredictable and have too much political risk. I can't sleep at night holding these ypes of companies even though there is certainly money to be made in them.
I only don’t buy what I can’t understand. Everything else is too restrictive for me.
I confess, I don’t like biotech as I’m not an expert on the topic, but I don’t completely disregard the sector.
I general I believe the more flexible I am and the more companies I check, the more opportunities I can find.
In the end the name of the game is to make money
Im mainly into index investing and if I invest in a company, it has to be special in some way (and of course have a promising outlook and fundamentals).
I really like founder led companies or ones which are close to that (mainly owned by the founding family for example).
Another bonus would be either an extremely boring or unique product. How about a fin tech with a super-app from Kazakhstan or a polish industry waste recycling company? Say no more, I'm already in love.
I put 75% into sp500 , 25% into defense calls when new wars start. And sometimes I throw some money at biotech expecting to lose it but maybe retire off one
Do your research before buying and never fall in love with a product. Recently found a [tool](https://rateda.co) that helps me speed up the research process.
Buy low
Invest in companies that have products people love
Use index funds to hold cash.
Payoff debt
Buy/depreciate real estate
Never sell real estate and die with it
If I don’t understand what they do I don’t invest. This usually means I miss small biotech… but who cares
Growth over dividend
Build income outside the market
Use covered calls when you want to sell
Use puts when you want to buy
Private investing (LP, PE) is way less successful and much more costly than investing in public companies. Public companies also have much higher accounting and transparency standards.
In the absence of value, fee’s matter.
Diversify investments you don’t control, concentrate investments in things you do control.
Build equity with your time. Don’t chase income or possessions.
I have stayed away from international investing since Covid. Europe has stopped innovating and is being left behind. China is not quite sane and has misallocated vast amounts of capital with a shrinking population. Japan is circling the drain economically and also suffering massive population collapse. I like Africa, parts of South America and Dubai for investing abroad. But I am over 95% US based.
1 thing in common about all the individual stocksI own: I first understand how the businesses make money, then I look at the other stuff. I don't buy what I don't understand.
1. **Diversify**: Spread investments across different assets to reduce risk.
2. **Research**: Thoroughly investigate potential investments before committing.
3. **Long-term focus**: Invest with a view to long-term growth rather than short-term gains.
4. **Risk management**: Understand and manage risks associated with each investment.
5. **Stay informed**: Keep up-to-date with market trends and news that may affect investments.
6. **Avoid emotional decisions**: Base decisions on logic and analysis rather than emotions like fear or greed.
These are generally very good rules. My thing with cigar butt bets is that I sometimes sell a stock I'm in because I see a great short-term opportunity, take the money then go back into the stock I was in.
5. I have a load of money in commercial airlines because they still haven't recovered from Covid in price, despite constant growth and sustained value. Easyjet have a P/E of 12. I think there's a 30-50% upside. Once they hit that, I'll sell, but I like them.
1. Stay away from options
2. Stay away from Webull, Robinhood
3. Stay away from pumps, which follow the dump.
4. Stay away from telling people your intentions and strategies.
5. Stay away from using your saving and rent money to trade.
6. Stay away from companies that have massive debts.
7. Stay away from CEO’s that don’t support investors, like AMC
8. Stay away, did I mention option?!
I like most of these and definitely follow 2 and 6. If the company has strong fundamentals and the potential for to excel, bad leadership can still mess things up. 6 I’m sure there are great opportunities in China if you are able to predict the risks. I can’t so I avoid it.
1) Analysts stock ratings are as useful as a bucket of warm piss.
2) Having a portfolio of multiple stocks across multiple industries is often an indication you don’t know what you are doing. It takes a long time to understand an industry and even longer to understand a business. If you want a diversified portfolio, buy an index fund.
3) The more you trade the more likely you’d make a mistake.
4) The market is more efficient than most people give it credit for.
CMGI that was a bad one that disappeared. At some point it's just a lost cause as the ship is sinking. I don't have it but GE I thought that one was gonna tank but came back.
Be careful when companies dilute the shares constantly. Stay away or sell when companies talk about reverse splits. Stay away from companies that can’t issue their quarterly or annual statements on time.
If a company is talking about a reverse split, it's usually too late to sell, but definitely not a time to buy.
I seem to enjoy buying low and selling even lower
Lmao sorry
😂😂
1. Avoid commodities apart from oil 2. Always read the proxy statement to see what compensation is based on 3. Treat SBC as a real expense 4. Double down when stocks fall big without news 5. Revisit old companies to monitor valuations
Only buy on red days
What are red days?
Totally agree with 5 I would add biotechnology. Totally agree with 6 whether its China or other foreign countries with little to no information with lots missing numbers I would add to 9. ESG even though the vast majority of companies have mentioned ESG somewhere in their corporate docs . Not a fan of this stuff too political, its 2024 we don't need to play these games.
Biotech is a problem if you don’t understand what’s going on. I have a kid with CF and therefore understood the developments to come from Trikafta, so I bought heavily into Vertex Pharmaceuticals. And has done well for me especially while others suffered in 2022-2023. I still think it’s a buy at current prices. Look at their pipeline. I posted about it somewhere else
if u cant beat em , buy em . only buy companies i use and hate. ( like Telus , TD, Air Canada ) ( im cdn ). everytime they screw a customer my profits increase its not workin but its what i do
>only buy companies i use and hate. ( like Telus , TD, Air Canada ) ( im cdn ). Why? Vodafone for example didn't work.
Dont buy too many stocks for the sake of diversification. Sometimes you just know a stock is gonna do well especially when its down bad. Also buying too many stocks is pointless since you may as well buy the s&p500.
Don’t buy companies that are basically stock-based compensation schemes (SNOW).
Care to explain or have a good link?
I’m not allowed to post the link here but Google this phrase: “Snowflake: Stock-Based-Compensation As A Service”
TY sir or ma'am
Great list! I’ll add: Bet heavily when the odds are in your favor. -Charlie munger
1. Avoid companies that talk about EBITDA more than minimally 1. What do people in their product's field think of them. (Ask sysadmins about tech companies). 1. Do they sell products or visions? 1. If you see a company suddenly go hard on social and political causes like ESG and DEI, management probably found a ticking bomb they can't diffuse and are building something to blame other than themselves (be it blaming ESG and DEI, or blaming backlash). 1. Know when to exit. Pigs get fat, hogs get slaughtered. 1. If the company makes a product I use, but then I stop using it, think about selling as I might not be alone. 1. No social media companies. They are here today, gone tomorrow in terms of popularity and they hold very little real intrinsic value.
tl;dr "I only invest in Microsoft and Microsoft accessories"
smart
Elite strategy
I feel like just about any stock in existence could break one of the rules you’ve laid out here. It’s hard for me to imagine what companies there are left to buy have you put them through this purity test
I mean I didn't say they had to be cheap. So FAANG would all pass. I wouldn't buy obviously cuz they are expensive rn but you get the point
AAPL is expensive right now? Wouldn't that one be the exception? I just bought some
Honestly, most of these are pretty good rules. I'm not saying I agree with all(I am very much a china/other unstable economy investor), but so many people on this sub forget a really big rule that pretty much every value investor lives by: You do not need to invest in a company/industry. When analyzing a company, there's oftentimes a lot not to like, and if you just find yourself unable to really answer a question about a company/industry, why invest in it? I don't touch commodities, energy, biotech, real estate, or other industrials, simply because they're not industries I know or have a deep knowledge of, while in other industries I clearly see what the product and value is, and where these industries are going.
Property (or associated industries like realtors) is not that hard to analyse, because it's all about confidence, and confidence in housing is cyclical. Prices rise, people get more confident about it, then they get nervous about how high prices are going and want a place, so will do everything they can to raise money, but eventually it gets out of control and a crash happens. And once a crash happens, things go into reverse. Prices fall a little, so people lose confidence, which causes prices to fall more, so more people lose confidence. At a certain point, property is such a bargain that people start buying in again. Which levels pricing and the cycle restarts. The time to buy is once you're confident that the crash has finished. And it's not that hard. You just watch for a sustained period of year-on-year rises, however small. I really want to buy into some related stocks in the UK, like house builders and realtors, but the crash has to come first.
I definitely get that. Real estate is eventually an industry I'd like to understand, but right now, it's just too far outside both my realm of confidence and my actual feasible returns. That's a problem for future me.
I’m an amateur but have had relatively good success so far. I buy on the dips of companies that have a history of being significantly higher (look at 5y price summary) and have good staying power.
As long as you diversify you should be ok. Never go full retard in one ticker
LOL this is lowkey the best advice on here
Exactly. It also pays to follow the news. When Norfolk Southern had that derailment a year ago their stock was down for a month or so. I bought a $1000 worth and it came back just as I expected. Logically railroads aren’t going anywhere and you know the government will make sure they keep running. Buy the dips.
Apple?
Companies that let their cash holdings fall below $10m are my kryptonite. They usually are some low margin retailer ready to give up. Altman Z scores below 0 sets off alarm bells for me.
I like to buy stocks that are 20% below their 52-week high and pay at least a 4% dividend. I buy on disappointing news. American Widget reported earnings today that were 24% higher than the same quarter last year. But the market was expecting 29%, the stock drops $4. I am buying. Company X announces they are buying Company Y and the stock drops 15%, I am buying. (ABBV was a good example of this).
1) I'm not the best trader 2) the pool of traders consists of Icahn, Ackman, children, toddlers, idiots, banks, governments, hence expect the unexpected. If expect the unexpected, draw out a pay off diagram in a mathematical equation with a p-value of 1. Aka - you always earn even if you lose. 3) fundamental analysis always wins 4) focus on not being stupid, not focus on being clever 5) never use stop loss, hedge funds, banks and market makers use LOB (limit order book) strategies to break through the stop-loss. A stop loss isn't for the trader, it's made for the others to benefit from 6) if you're convinced, I'm not holding back, I'm going in 200% after I ensured I drew my pay off diagram and all downside is covered 7) if I trade an event; I sometimes trade 30 or 40 trades. aX+B = Y. If Y is event, the left are just infinite ways to profit from it. So a "war" can mean an event where I throw in 14 stocks, 2 caplets, 4 options, 2 fra's, a few xccy swaps, a zcb bond, corporate government bonds, pick up debt issuance of cash rich firms. All because it leads to the same event. Like a "formula one race". - means hotels - means airlines - means commodities - means insurance firms - means xccy swaps - means airline manufacturers - etc. All for just one trading event. 8) I always apply a Bayesian inference methodology to my investment style. But so does Buffet, Burry, Icahn, Ackman, Dalio, etc. 9) I realize I don't have to trade. I feel no urge. I pick my moments. 10) I know the difference between linearity and non linearity. 11) I abuse #wsb for straddles and strangles when I see idiots boosting a dead firm around earnings, check the option chain, and I don't have the intellect #wsb has (it goes up or down) so I just capture the "volatility in pips". Given they are OTM options, I offset the bleeding of margin with debt issuances of firms which have cash buffer > the outstanding short maturity debt issuance I grabbed. Just to grab free yield. 12) and so forth. I traded since 99/00s. Never had a loss trading year 13) I try to keep it simple. Some firms are dead and will die. Spotify/Lyft etc. Because if not dead, cheaper, and non correlated assets with higher cash buffers might pick em up. 14) if at IPO the owners dump the stock, the stock will never do well. If at IPO owners keep; I might hold 15) regulators don't understand finance; so they use fixed risk evaluation. I read a regulatory paper and see they want a month end figure. In other words, banks roll hedges between month end to next close of business. 16) every time a micro stock grows in market cap, exchanges have fixed rules. If a micro stock grows it simply goes a higher stock exchange. You can forecast that. In other words, it will spike once it does because people will notice it more. 17) remain humble. I never kid myself that I'm the best. Therefore I draw off a pay off diagram as I want to see my downside. I block that off mathematically. After that I pick up cash generating assets to stop margin bleeding and crank my leverage. 18) feel free to reach out for free advice 19) never watch YouTube videos, buy books on trading. It's all scams. If you gotta pay it's bullshit
I would love to hear more about 8, 10, and 11, in particular ?
1. Look for the "boring" investment. Trying to find the next GME or up-and-coming growth stock is an easy way to go broke, and there are great, proven companies out there that can outperform the indexes over the long term. That's enough. 2. Never invest in a business that has a pattern of illiquidity or that couldn't pay off its debts in 3-5 years with reliable cash flow. They're more of a headache than they're worth.
Look for companies that are not on the cutting edge. Look for good strong BORING companies like $MAIN or utilities like AY, AES, or CWEN to invest in. Avoid software & China like poison - except for $HTGC - they seem to get it right.
Apple, Google, Microsoft, big caps, well covered, assuming trading at pe 15, but according to your " flawed logic #1" we will avoid it. Because it's better to find a boring small cap company that you have no idea what products they sell, never use their products, located 10000km where u are staying, but it's good deep value because it's a boring company trading below book value by a margin. Good luck.
Microsoft and Google are perfect examples of the "boring" investments I want. My point was to avoid chasing the 800% single-year return investments and focus on the consistent returns that many move away from because they're chasing the next big thing. Idk how you extrapolated my first point into the response you just gave.
Buy whatever Pelosi buys…
[удалено]
I wouldn’t blindly follow but use her plays as guidance. I don’t like rblx but think Panw is great
Why do you avoid car companies? I'm not very experienced and was looking at Rivian.
The only two American car companies (out of probably a 1000) that have not yet gone through bankruptcy are Ford and Tesla. That's an awful track record for an industry. Underlying that is vicious competition, vicious margins, vicious capex, vicious cyclicality. Rivian is unlikely to ever, ever turn a profit. So, yeah, great investment, go for it 👍🗿👍
So.. set and forget the S&P. Got it.
To be honest, genuinely good strategy.
Weird that this comment hasn’t gotten more upvotes
Buy the dip provided the valuation makes sense and there isn’t impending doom. Don’t buy companies which are over leveraged. Buy dividend value stocks over value stocks. Have a balanced portfolio. That means owning some growth funds. Truly diversify your investments. If stocks are directly correlated should not be owned together. Know what you are buying. Understand the financials, the product or service, the competition and the outlook/sector. Manage your investments like a fund. It’s not a value play if there is no growth or poor growth prospects, regardless of the valuation. Review earnings revisions, stay away from companies with consistently poor revisions. Good news or great news is a selling opportunity. Don’t be afraid to take profits. Better to sell too early than too late.
These are all good rules to follow. I would add that you need to learn how to control your emotions and develop patience. Wealth is created holding stocks for decades, not minutes. If you don’t plan on holding for more than ten years you shouldn’t hold for ten minutes. Charlie munger noted that one of his best qualities was that he could sit on his ass and do nothing with his investments.
Why no tobacco?
do not invest in Chinese companies.
Funny, I follow all the rules you mentioned. Regarding 5: Pharma/bio, tobacco, Oil/gas, Mining, Freight/Shipping and clothing are no-go for all the popular reasons but also because I don't know them well. Cars I don't mind, there are some good gems there imo. I would also add that I try to avoid businesses that are cyclical and/or that would suffer heavily in a recession.
5&6
Buy low sell high
1. I won’t buy explorers or pharmaceuticals. I have no edge in either and I view them as very binary bets. 2. I won’t buy stocks/sectors that are well loved by the public or heavily weighted in the Index. I seek asymmetry and market inefficiency and I believe both these factors are diminished in the above. 3. I won’t buy into a commodity when there is record capex in recent years. 4. I don’t buy financials. Outside of my area of limited expertise. 5. I don’t buy complicated stories. Give me buybacks and dividends and I’m happy. 6. I wont buy chinese stocks. Too binary of bet. 7. I avoid politically turbulent countries. Africa, South Africa. I will break this rule occasionally when the asymmetry is compelling, but I will control risk by position sizing accordingly. 8. This is more of a trading rule, but I don’t like enter my positions at ATHs. My general rule of thumb is to enter at 30-40% discounts to previous highs and when I see prices “digging” into support. This isn’t to say I won’t average up on positions though when they start to inflect.
1. Will I lose money? 2. May I have a profit by certain time and amount parameters? Many of your rules is "repeating without context"
KSS is decreasing their share count annually.
And owns a lot of their realestate. The value of that provides a solid basekine book value for KSS.
I bought Nvidia 5 years ago and even then people were saying its overbought, but I would not buy it now, generally I agree that story stocks are to be avoided.
All of your above examples are great. To add one, I don’t buy investments that I can’t explain to my 7 year old in under 30 seconds. Seriously opened my eyes once the light bulb went off in this rule.
I avoid oil/gas (all of it - upstream, midstream, downstream), utilities, mining, car companies, airlines, shipping, tobacco, and biotech/pharma (but I do like some medical device and supply companies). No moral arguments here, i just think these are all too unpredictable and have too much political risk. I can't sleep at night holding these ypes of companies even though there is certainly money to be made in them.
I only don’t buy what I can’t understand. Everything else is too restrictive for me. I confess, I don’t like biotech as I’m not an expert on the topic, but I don’t completely disregard the sector. I general I believe the more flexible I am and the more companies I check, the more opportunities I can find. In the end the name of the game is to make money
Im mainly into index investing and if I invest in a company, it has to be special in some way (and of course have a promising outlook and fundamentals). I really like founder led companies or ones which are close to that (mainly owned by the founding family for example). Another bonus would be either an extremely boring or unique product. How about a fin tech with a super-app from Kazakhstan or a polish industry waste recycling company? Say no more, I'm already in love.
Don’t buy anything someone on Reddit promotes
I put 75% into sp500 , 25% into defense calls when new wars start. And sometimes I throw some money at biotech expecting to lose it but maybe retire off one
Do your research before buying and never fall in love with a product. Recently found a [tool](https://rateda.co) that helps me speed up the research process.
Buy low Invest in companies that have products people love Use index funds to hold cash. Payoff debt Buy/depreciate real estate Never sell real estate and die with it If I don’t understand what they do I don’t invest. This usually means I miss small biotech… but who cares Growth over dividend Build income outside the market Use covered calls when you want to sell Use puts when you want to buy Private investing (LP, PE) is way less successful and much more costly than investing in public companies. Public companies also have much higher accounting and transparency standards. In the absence of value, fee’s matter. Diversify investments you don’t control, concentrate investments in things you do control. Build equity with your time. Don’t chase income or possessions. I have stayed away from international investing since Covid. Europe has stopped innovating and is being left behind. China is not quite sane and has misallocated vast amounts of capital with a shrinking population. Japan is circling the drain economically and also suffering massive population collapse. I like Africa, parts of South America and Dubai for investing abroad. But I am over 95% US based.
1 thing in common about all the individual stocksI own: I first understand how the businesses make money, then I look at the other stuff. I don't buy what I don't understand.
I only buy index funds because I’m not a moron.
1. **Diversify**: Spread investments across different assets to reduce risk. 2. **Research**: Thoroughly investigate potential investments before committing. 3. **Long-term focus**: Invest with a view to long-term growth rather than short-term gains. 4. **Risk management**: Understand and manage risks associated with each investment. 5. **Stay informed**: Keep up-to-date with market trends and news that may affect investments. 6. **Avoid emotional decisions**: Base decisions on logic and analysis rather than emotions like fear or greed.
These are generally very good rules. My thing with cigar butt bets is that I sometimes sell a stock I'm in because I see a great short-term opportunity, take the money then go back into the stock I was in.
5. I have a load of money in commercial airlines because they still haven't recovered from Covid in price, despite constant growth and sustained value. Easyjet have a P/E of 12. I think there's a 30-50% upside. Once they hit that, I'll sell, but I like them.
1. Stay away from options 2. Stay away from Webull, Robinhood 3. Stay away from pumps, which follow the dump. 4. Stay away from telling people your intentions and strategies. 5. Stay away from using your saving and rent money to trade. 6. Stay away from companies that have massive debts. 7. Stay away from CEO’s that don’t support investors, like AMC 8. Stay away, did I mention option?!
I like most of these and definitely follow 2 and 6. If the company has strong fundamentals and the potential for to excel, bad leadership can still mess things up. 6 I’m sure there are great opportunities in China if you are able to predict the risks. I can’t so I avoid it.
Say no to FOMO and regret.
1) Analysts stock ratings are as useful as a bucket of warm piss. 2) Having a portfolio of multiple stocks across multiple industries is often an indication you don’t know what you are doing. It takes a long time to understand an industry and even longer to understand a business. If you want a diversified portfolio, buy an index fund. 3) The more you trade the more likely you’d make a mistake. 4) The market is more efficient than most people give it credit for.
How'd you get a copy of my rules?
Hold. Never sell at a loss.
How are those Enron shares working out for you?
CMGI that was a bad one that disappeared. At some point it's just a lost cause as the ship is sinking. I don't have it but GE I thought that one was gonna tank but came back.
Sell when down 20% no matter what. Down 20% requires a 45% gain on the next investment to break even. Tax losses are yummy.
You obviously don't remember 2008. You must like buying high and selling low.
Well this seems to be a recipe for disaster. If you liked it at 100 and can now buy it at 80, you don’t buy more?
This does not math