Buy when stocks are undervalued, sell when stocks are overvalued.
Value investing emphasizes patience, but most people lack patience. If everyone had to choose
1) Eat a piece of cake right away
2) Eat 3 pieces of cake five days later
Most people would choose 1), wanting to enjoy themselves promptly.
Taking a defensive stance is low-risk investment.
Utilizing the power of compound interest, using time to achieve the accumulation of wealth like dripping water penetrating the stone, gathering sand to build a tower.
Value investing can be assumed that if you had enough money on hand, would you buy a large stake in the company? If the answer is yes, then this company is worth buying.
Avoid doing business if you are not familiar with it.
Stocks are similar to businesses, so you should only buy familiar stocks and earn money within your own capabilities.
Stock investment is like partnering with others in business. Do not invest in stocks with a quick money-making mentality, as it will be difficult to make money.
Characteristics of outstanding companies
✅Profit margin exceeding 20%
✅ROE of 10% or more
✅Hold free cash flow
✅Dividend yield higher than bank FDs
✅The top 30 shareholders hold more than 75% of the equity.