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Learn from their mistakes – you can’t live long enough to make them all yourself.
Learn from their hard-earned experience what works and what does not.
The great investors follow the principles of bottom-up analysis in an independently minded fashion. They are wonderfully inquisitive about profit, balance sheet, cash flow, the notes to the accounts and the business strategy and people.
They learn and continuously improve by devoting more time to reading and thinking rather than doing; trying to widen their circle of competence, but not stepping outside it.
Within the realm of investing with its overarching rules of (1) thorough analysis, (2) margin of safety, and (3) looking for a reasonable return, there are many alternatives approaches. Here are some examples of starting points for analysis:
- Low share price relative to past earnings, whether that be recent earnings or those averaged over a long period such as a decade.
- Growth at a value price. Phillip Fisher conducted such a thorough analysis that he was able to successfully anticipate rapid advances in earnings. He laid great store by the quality of the leaders.
- Low price relative to combinations of value metrics such as dividend yield, book to market ratio and earnings. Benja………………………………………..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
