| Previous: | |
| This page: |
- The only reliable predictor of stock returns is the underlying business.
- If the underlying business is sound, the next thing is to buy the stock for as low a price as possible. Paying a low price is the best protection if it turns out you were wrong in your initial assessment of the value of the business (The Margin of Safety Principle).
- Have emotional discipline. Don't be influenced by the mood swings of the market. Market developments are often based on emotions, but not always based on reality.
- Diversify your portfolio to spread the risk.
- Think long term (Bull markets AND bear markets).
- Aim for adequate, not extraordinary.