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What to own:

  • Invest in what you understand or can understand. I won't try to paraphrase Peter Lynch's words from One Up on Wall Street. I don't know anything about companies making advanced pharmaceutical products or underwater oil drilling rigs, so why would I want to own part of their business? Consider yourself a part owner of the company, because in reality, you are. "Although it's easy to forget sometimes, a share is not a lottery ticket... it's part-ownership of a business" - Peter Lynch

  • Have equity in the finest American companies, hopefully with the best management. Find best in breed and dominant leaders in their area of business, any kind of advantage they have over their competition is a plus. Preferably a business with a MOAT, or is a difficult market to enter, providing security. Boring is ok, you don't need to invest in the next biggest tech stock or fad to make money.

  • Ideally the company will generate the majority of their revenue in the United States. This will allow their financial strength to be strongly correlated to the success of the US economy, arguably the strongest economy in the world. It will also help avoid currency fluctuations and a strengthening US dollar.

  • "Go for a business that any idiot can run - because sooner or later, any idiot probably is going to run it." - Peter Lynch

  • "Brand names" are very important. Products that are part of our lives and have huge fan followings will not be as effected by slowdowns, things people just can't live without (think Marlboro cigarettes or Starbucks coffee or a Pepsi/Coke). Also always looking for "Brands in the Making," companies who could be brands of the future!

  • Know the shareholder base of the company. Are the shareholders short term speculating day traders just trying to make a quick buck? Or, are they hedge funds with well known managers and the largest institutions. Things like these can have huge effects on the stability and future of the stock.


View of Markets:

  • What moves the stock market? Supply and Demand. "In the short term the market is a popularity contest; in the long term it is a weighing machine." -Warren Buffett.

  • Ignore the noise! Try to visualize the real long term impact of news and events. The stock market is only there to tell you what your stock is worth on a day to day basis, if you aren't planning on selling on that day, the price shouldn't matter to you. (to a certain extent) Always look forward, history does not dictate the future. "We invest in the present, but we invest for the future" - Benjamin Graham

  • "I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years." - Warren Buffett. If you need to check your investments on a  daily basis because you are worried about them falling apart, you are investing in the wrong companies.

  • Focus on what matters in the long run, earnings. If a company can grow earnings and increase dividends year over year, most news doesn't matter. "If a business does well, the stock eventually follows. " - W.B.

  • Take advantage of when Mr. Market miscalculates. The market is going to always exaggerate movements, find value when the market "miscalculates" or underprices. "Bad news can be good news."

  • When things seem like they couldn't get any worse and pessimism is at its height, its time to take an opposing view and go long. When everyone is bullish and it seems like nothing can go wrong, its time to lighten up. (actually determining this timing is much more difficult than I make it sound) "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." - W.B.

  • "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. " - Sir John Templeton

Portfolio Management / Trading:

  • Control risk/smart risk. "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." - George Soros

  • Do not make trades, make investments

  • Low to Zero fees and trading costs, discount online broker

  • 1 year plus outlook and holding duration, extremely tax efficient.

  • Diversification of assets. Though my portfolio is a common stock portfolio, I did make an initial purchase of 20% treasuries and later purchased another 10-15% in Munis. These are not long term allocations, and are more cash management.

  • Have cash, or liquid assets to take advantage of any situation. When everyone has cash, cash is worth less. When everyone is invested and no one has cash, cash in king.

  • Patience. "It can always go lower"

  • Have a strategy, stick to it. Adjust over time as things work and do not work, learn from your mistakes.




  • Consistent earnings growth is a must, Strong cash flow and "fortress like" balance sheet. Debt is fine if it is smart debt and under control.

  • Paying up for growth is ok, but at a reasonable price, and small positions only when dealing with stocks with high P/E ratio's. GARP - Growth at a Reasonable Price.

  • Look for a margin of safety.

  • Know the Bear case for your company. Don't be caught off guard of changes in the market that your company is missing.

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