Saturday, June 30, 2012

The One Thing

Anand Chokkavelu writes of 100 things he's learned in investing.

Me, I [try to] look for the one main thing.  Let me see if it's in the list.

Hmm.  Not really.  [Well maybe #29 sort of touches on it]

Let's see if I can find an appropriate Warren Buffett quote.

Well I guess there's this one:

If a business does well, the stock eventually follows.

and these:

It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.

Time is the friend of the wonderful company, the enemy of the mediocre.

The main idea?  Buy great businesses at a reasonable prices.

Or as iluvbabyb put it "Buy HI-quality companies at reasonable valuations for the long term."

[Or Peter Lynch's price follows earnings.  So if earnings goes up then price goes up.  And assuming a great company will pump out greater and greater earnings.  Or maybe it should be ROE or ROIC if the company is paying dividends.]

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