“Never invest in a business you cannot understand.”
At times when the markets are down its tempting to invest in businesses thinking of them being undervalued without understand the nature of their business and market. In stock terms we call it Bottom Fishing. No matter how tempting it is avoid investing in businesses that you do not understand or aren’t aware of
In the business world, the rearview mirror is always clearer than the windshield.
Taking losses in market can be heartbreaking and equally heart breaking is to miss out on profit booking. On hindsight it may appear that you should have seen it coming but never be hard on yourself as it is easier to look back that to look into future.
It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Many investors go for investing in companies when it seems to be available at discounted price and avoid great companies even when available at a fair price.
Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
Warren Buffet always preferred long term investments. Put your money in companies whose shares you don’t mind holding even after 10 years.
Be fearful when others are greedy and be greedy only when others are fearful.
Many a times you would notice a heard mentality in Stock Trading. Panic selling even on slightest negative news and huge intraday growth without any substantial reason. This is because when market is bullish everyone goes into buying spree and when market is bearish everyone start selling in panic. Warren Buffet contrarian view is to be cautious when the market is bullish and buy aggressively when market seems to be down.
Someone is sitting in the shade today because someone planted a tree long time ago.
Investing is a life long process. If you are looking for returns today, you should have started investment years ago. To build a profitable portfolio, you need to give it years.