Cherry picking during a crisis
Am back at doing what i would love to do in an ideal world. Picking up stocks when the market is down and everyone’s panicking. Some of the best companies with the best cashflow and a good order backlog are available at cheap prices. With the bears having a field day, it also gives me a chance to average out the prices of the stocks that i had bought earlier at higher prices.
In 2005, when i first started investing, i had an idea in mind. By 2015, when i would turn 40, i should have enough to retire from a daily 8-6 job and do something more constructive with my time and energy. The only avenue that could give me such returns were the stock market. The catch being, one should invest over a long period of time so that you invest when the market is high as well as when the market is low. Real estate was another option, but i never had the money to invest in a land or a house. With prices at ridiculous highs, i thought it was better for me to invest in a piece of a business that i liked.
Most of the time, people panic and run away when the market crashes like its now. The greatest investor alive, Warren Buffet believes that the best time to buy good companies at cheaper prices is when there is blood on the street. Everyone would love to time the market, but then no one can every predict when the market is at its lowest and when the market is at its highest. The only way to make money in a market is to systematically buy into good companies constantly.
Never invest in a business you cannot understand
Always invest for the long term
Buy a business, don’t rent stocks
Price is what you pay. Value is what you get
Stop trying to predict the direction of the stock market, the economy, interest rates, or elections
Above charts from Yahoo Finance