- It is not about buying high quality assets. It is about buying assets for less than they're worth.
- 100-baggers like Titan and Page Industries are hundred baggers only in hindsight. Stop looking for them.
- You don't need complex math to value a company.
- Diversification as powerful a force as concentration if you know how to use it.
- Give each stock a performance deadline.
- Do what you have to do; don't worry about what the stock market is going to do.You either get good news or good price, but seldom both.
No, I didn't come up with this gem.
It is one of my favourite quotes though. It nicely sums up the biggest mistake value investors make.
They wait for good news to arrive before investing in a stock that's trading at very good prices.
However, as the sixth mantra says, if you do so, the good price may no longer be a good price.
It is quite possible that the market has got a whiff of the good news and it has already bid the stock price higher. So it's either good news or good price but hardly ever both.
This is the same as saying do not ever wait for a catalyst to arrive. Because by the time it arrives, the opportunity may have already gone.
And in fact catalysts are extremely impossible to spot.
Graham himself called them one of the biggest mysteries in finance, something that works extremely well but is very difficult to explain.
Over the years, if you simply buy a group of stocks with consistently strong balance sheets and low enough valuations, you don't necessarily have to look for catalysts.
And I have seen this come true over and over again since the start of becoming a stock market freak, probably 10years.
Trust me, this works better than you think it would.
