Interactive thread on investment-related questions

[Southie]

Re: Interactive thread on investment-related questions

@arshad5

If you just look at things like P/L, Balance Sheet and Cashflow then that is a very narrow way of looking at the company. I also look at these things but also look at the broader picture e.g the management, the industry, competitors, the macro economy, stage of the cycle, intrinsic value, growth potential, trends. To achieve superior results you have to have superior knowledge or superior insight. Also when to buy is the key. You also need to buy a stock that you would be happy to own for the long term, and then after purchasing you just need to imagine that the market has closed down for 10 years.

Sure. Management matters. Industry matters. As for macro economy and stage of business cycle, when economy is doing well most times that is reflected in prices. When business or economy is at peak of bus cycle prices reflect that. Most times the 3 statements reflect all these metrics.

When you buy good companies at attractive prices you don’t have to check prices daily or frequently - as you said. Buffett also has 2 rules as you know- don’t lose money. Don’t forget rule 1.

What you have suggested most certainly is an improvement over my approach. I am not very good at macroeconomy analysis. Market has flummoxed me when I have tried to incorporate it.

Maybe you can provide a test case of a stock or stocks that now meets your criteria.