Tips to Succeed in Stock Market
Legendary Investor Warren Buffett once advised, "Be greedy when others are
fearful."
Buy when you cannot find a Bull. Thanks to a fear-filled summer, many top notch
stocks are still trading well below their potential, giving savvy investors the
opportunity to strike it rich.
Time to Get Greedy?
Graham taught Buffett to ignore the markets and focus upon buying the
underlying worth of the stock. Buying stocks below their book value and having
a margin of safety were key Graham investing themes. Graham taught Buffett to
look beyond the current stock price to the "intrinsic value" of the stock..
And, then, to only buy the stock if it could be purchased at a steep discount
to its intrinsic value, giving a large margin of safety
Buffett's partnership portfolio over ten years grew by a modest 1,156% compared
to the Dow's 122.9% and other major world indices.
The Start of a Bull Market ?
The bottom of the market starts at a time when the stock market is weak and the
general population is pessimistic. At this point most investors sell after
having endured a long and torturous bear market. This extreme pessimism found
at a bottom is always irrational and undeserved. Now the market is undervalued
and is a bargain. Savvy investors, the “smart money”, buy bargain stocks
knowing that they will be able to sell them higher in the near future. Smart
money buying, called accumulation, causes stocks to rise. The smart money often
consists of NYSE specialists, Nasdaq Market Makers, hedge fund traders and
corporate insiders. These traders have access to information that the general
public does not.
Rising stocks eventually gain the respect of mutual funds, as Billions of
dollars of capital is introduced into the market place. Mutual fund investment
causes the stock market to advance in a powerful manner. Much of the steady
large trends are powered by mutual funds and other institutional investors.
Stock Market: Buy or Not?
When you go to the store and see a pair of designer slacks that you've had your
eye on for some time on sale, do you buy them? Or, do you fret, thinking that
if you wait they might be even more discounted? Of course, in the latter
scenario you stand the risk of someone else buying them first and they aren't
available at all.
Such is the state of the current stock market. If you buy now, the market could
go down further and you'll be sorry. If you wait, the market could go up, and
you'll still be sorry because you didn't buy earlier. Dissatisfaction with your
decision can plaque you either way... That is just plain disconcerting.
Will you become the next Warren Buffett? Yes or No. But, I'll leave you with
this: "History repeats itself", and we can learn a great deal from history.
And, hopefully, not repeat the mistakes of others. Maybe, even, in some limited
way, we can repeat some of the successes others before us have achieved, if we
understand their methodology at the time and absorb some of the lessons they
have learned in the past.
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# Look at market fluctuations as your friend rather than your enemy; profit
from folly rather than participate in it. "A good momentum is a good
opportunity".
# We simply attempt to be fearful when others are greedy and to be greedy only
when others are fearful. "Buy when you cannot find a Bull".
# Only buy something that you'd be perfectly happy to hold if the market shut
down for 10 years.
--Warren Buffett Quotes --
Smart Investment ideas
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