The pitfalls of a sector rotation strategy
Investing based essentially on the business cycle outlook is a fools’ game.
Part 7: Building and Managing a Portfolio
Conservative investors win – conventional investors lose
Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally
How Warren Buffett goes about valuing companies
We are going to want to get a significantly higher return, obviously — in terms of cash produced relative to the amount we’re outlaying now — for a business than we are from a government bond. That has to be the yardstick at a base.
The dangers and benefits of using Discounted Cash Flow analysis reports
Opinions of fair value based on DCF calculations are necessarily inexact (rightly vague?). But, at least they at least ask the right question.
How to get the most out of analysts’ reports
Since analysts’ reports are so important in our work of identifying and studying companies to invest in, we need to look at the strengths and weaknesses of these reports.
What is the right price earnings ratio?
Price earnings ratios are a frail and shifting basis for determining fair value. They do not force investors to think through all the factors that go into a deep assessment of fair value.
The common misuse of charts
These charts tend to exaggerate recent prices and understate older prices. As the time period increases the distortions of the chart increase.
19 Cardinal rules on selling stocks
There will be significant fluctuations in the price of individual stocks in one’s portfolio, but this is background noise. Against this noise the investor must monitor their portfolio to detect signs that the superb companies in their portfolio have not or are not deteriorating in character and quality. Where quality has deteriorated, the investor should not hesitate to sell.
Is the price earnings ratio (P/E) obsolete?
Price earnings ratios are simply a rule of thumb. They can lead you astray. But what is worse, they are becoming less and less valid with every passing year.
Lessons from the world of gambling
One apportions investment positions or portfolio weightings according to one’s informed estimate of each stock’s probable return; it is the weighting that provides the highest geometric mean of outcomes; betting your beliefs.