What is a Good Number of Stocks to Own?
The number of stocks in a portfolio can have a major influence on your ultimate results as an investor. Because of this, every investor must answer the question: what is a good number of stocks to own? The short answer is that there is no right answer. The much longer answer is that it depends […]
The Meaning of “Fish Where the Fish Are” in Investing
“Fish where the fish are” is a quote by famous investor Charlie Munger to explain the art of value investing. All investors want to buy low, sell high. They want to buy a stock, and sell it some day at a higher price. Taken to the extreme, this core idea represents what value investing is […]
The Top Down Investing Strategy: Pros, Cons, Pitfalls, and a Hybrid Approach
Updated 5/5/2023 Fundamental investing can take two paths: “bottom up” or “top down.” One style of evaluating stocks is not better than the other. In fact, there are different types of both bottom up and top down investing within those main camps. And finally, there’s nothing stating that an investor needs to be either top […]
What Kind of Investor Are You? How to Find Investment Ideas
Finding good investment ideas can be difficult, regardless of whether you are a seasoned investor or Warren Buffett. To assist you in finding the next hot stock, a seemingly limitless variety of financial services firms make grand claims. And everyone has that one overly enthusiastic neighbor or cousin constantly pushing the “next big thing.” Avoid […]
Active and Passive Portfolio Management: Pros and Cons [for Average Investors]
Updated: 5/23/2023 There are two major ways to manage an investment portfolio. Active portfolio management means actively buying and selling stocks regularly. Passive portfolio management means passively buying and holding stocks, without much activity. Average investors can also take an active or passive approach. An investor could do passive portfolio management, on a personal level, […]
What is a Quality Company and Why Should I Pay Up?
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” -Warren Buffett Many investors use the above Warren Buffett quotation to describe his investment approach. Buffett now emphasizes investing in high-quality firms and has since stopped purchasing inexpensive, unloved enterprises. He emphasizes his willingness to […]
The 7 Ground Rules for Warren Buffett’s Partnership that Led to 24.5%+ Gains
At a young age of just 25 years old, Warren Buffett had a keen vision on how he would run his partnership and achieve superior returns for investors. He called these principles The Ground Rules. All partners, friends and family had to agree to these terms so they could understand Buffett’s vision. To say that […]
Why Now is a Great Time to Build a Globally Diversified Portfolio
U.S. stock market valuations are beginning to excite me again after this year’s fall of 15.3% from 52-week highs. Even more so, developed markets across the globe are all hurting in the rising interest rate environment with valuations that compare favorably to U.S. markets as this article will explore. Broad European indices trade at 11.6x […]
Stock Buying Checklist: Essential Part of Evaluating Stocks (Example Checklist)
The stock buying checklist is one of the essential tools to any investor, in my opinion, and to most, an underutilized tool. Using a checklist is a fantastic way to learn from your mistakes, plus it can help you standardize your investment process by building on your experience and what you observe throughout your career. […]
The 5 Types of Stock Correlation — With Examples and Calculations
“The possibility of permanent loss is the risk I worry about.” Howard Marks, The Most Important Thing Avoiding the possibility of losing money is Buffett’s number one rule, and many value investors subscribe to that idea, including yours truly. One way to determine a stock’s riskiness in your portfolio is to analyze your asset construction […]
