- Looking at cycles in terms of valuations is one of the keys to Bull’s Eye Investing
- Valuations at the time you invest determine the returns you will get over the next 10 to 20 years.
- Return = dividend yield + dividend growth + change in valuation as measured by P/E
- Buying a company that is valued below its Graham Number and holding for 2 years was found to return 24% compounded - more than Buffett
- Target investments to where market is going, not where it has been
- Always buy value!
- Screens and Graham Number are only the beginning - you must then learn everything you can about the company
- Look at Edgar and see who has filed a 13-G or 13-G/A. These companies have someone who passively owns 5% or more of the company
- Set stop loss orders and stick to them - sell losers and let winners ride
- Set price targets for your stock and when to and how much to sell
- Be patient, don't time the stock and don't fall in love
- Do not invest more than you can bare to lose
- Ideal stock is undervalued with a good dividend and good dividend growth rate
- The most important part to understand about an investment is why it will make money. Then the how, strategies, risk, managers, structure, etc
What I got out of it
- Great read on investing which argues more for looking at historical trends and patterns in order to be able to use them to our advantage today. Spot the trend, get ahead of it and you can do very well for yourself. Be aware, there is of course much deeper knowledge required than what can be found in this book so do not take it (or anything else for that matter) as the be all, end all to your investing questions and fears.