Posted by pakdi on August 27, 2008 – 6:30 pm
1. Industrial firms should have current assets worth at least twice their current liabilities. Long-term debt should not exceed working capital.
2. The stock should have paid dividends for the last 20 years.
3. The company should have a minimum increase of at least one-third in per share earnings in the past ten years using three year averages at the beginning and end
4. The current stock price should not be more than 15 times the last three years’ average earnings.
5. The current stock price should not be more than 1.5 times the last reported book value.
(Warren Buffett : An Illustrated Biography of the World’s Most Successful Investor)
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Posted by pakdi on August 11, 2008 – 1:19 pm
Peter Lynch, who was a portfolio manager of Fidellity Magellan Fund, which was the best performing fund in the world unedr his leadership from May 1997 to May 1990. Mr Lynch is currently vice chairman of Fidelity Management & Research Company.
Here are some advice form Peter Lynch, on investing, particularly in stock market investment area:
1. Don’t overestimate the skill and wisdom of professionals.
2. Take advantage of what you already know.
3. Look for opportunities that haven’t yet being discovered and certified by Wall Sreet - companies that are “off the radar scope”
4. Invest in a house before you invest in a stock
5. Invest in companies, not in the stock market
6. Ignore short-term fluctuations
7. Large profits can be made in common stocks
8. Large losses can be made in commons stocks
9. Predicting the economy is futile
10. Predicting the short term direction of the stock market is futile
11. The long term-retuns from stocks are both relatively predictable and also far superior to the long term returns from bonds.
12. Keeping up with a company in which you own stocks is like playing and endless stud-poker hand.
13. Common stocks aren’t for everyone, nor even for all phases of a person’s life.
14. The average person is exposed to interesting local companies and products years before the professionals
15. Having an edge will help you make money in stocks
16. In the stock market, one in the hand is worth in the bush
(Peter Lynch & John Rothchild - One Up Wall Street)
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Posted by pakdi on July 29, 2008 – 1:32 pm
There are readers who asking me regarding stock options. They may have been offer a stock options from their company. Yahoo Finance has a good reading material for you, regarding stock options.
Options on stocks and stock indexes are derivative instruments. Stock investors may use stock options to hedge against a price decline, to lock in a future purchase price, or to speculate on the future price of a stock. Employees may also receive stock options through an employee compensation plan. For employees, stock options represent the potential for growth in value and the possibility that the increase in value will be taxed at a favorable capital-gains tax rate.
Please read more on stock options here.
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Posted by pakdi on July 13, 2008 – 9:41 pm
John Templeton (1912-2008) famously known as a value investor who bought $100 of every stock trading below $1 on the New York and American stock exchanges. Templeton’s trade got him a junk pile of some 104 companies, 34 of which were bankrupt, for a total investment of roughly $10,400. Four years later he sold these stocks for more than $40,000!
Among his famous quotes:
“If you want to have a better performance than the crowd, you must do things differently from the crowd.”
“When asked about living and working in the Bahamas during his management of the Templeton Group, Templeton replied, “I’ve found my results for investment clients were far better here than when I had my office in 30 Rockefeller Plaza. When you’re in Manhattan, it’s much more difficult to go opposite the crowd.”
More on him:
1. Trailblazing Investor Spotted Market Opportunities Where Others Weren’t Looking
2. The Greatest Investors: John Templeton
3. John Templeton 1912 - 2008
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Posted by pakdi on May 21, 2008 – 12:07 am
Q: What advice would you give to someone who is not a professional investor? Where should they put their money?
Answer from Warren Buffet:
Well, if they’re not going to be an active investor - and very few should try to do that - then they should just stay with index funds. Any low-cost index fund. And they shoud buy it over time. They are not going to be able to pick the right price and the right time. What they want to do is avoid the wrong price and wrong stock. You just make sure you own a piece of American business, and you don’t buy all at one time.
Source: Fortune Magazine (April 28, 2008)
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