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by thisIsNotMikey 4138 days ago
Buy low sell high. Research value investing. Although some would argue he is not, Warren Buffet is a self described value investor. It is a method that is no thrills, but has a great track record. The premise is to buy securities, which are undervalued. The trick is learning to "value" a company. Personally I like to mix Peter Lynch's buy what you know with value investing. Once you do a few google searches on value investing, Read Benjamin Graham's The Intelligent Investor; it's a bit dry and seems outdated in some sections, but it is a classic, and he was buffet's teacher. Next Google search for Berkshire hathaways shareholder letters. After this, I would focus on valuation metrics and learning how to value a company. Eventually though, you just have to buy a stock. No book or course can predict if a stock is a good investment, but by employing the techniques I mentioned, you provide yourself with a margin of safety.
1 comments

While valuation metrics are one aspect of trading and I do think that most beginners do overlook the basics of them that should be covered before almost any investing.

For real returns it may not always be best to play it by all the metrics. It is important to note that the market itself fluctuates a lot on sentiment and sometimes a good valued holding can turn sour fast even with good metrics but bad timing.

Some companies will over invest in dividends which in turn means they are not investing in growth as much as they could be for instance.

Some companies will try to grow revenues but by focusing too much on the quick buck of short term and will not be as good for longer term with steep competition.

It is also important to note that the market reports of portfolio manager purchases like berkshire hathways tend to report just the stock name and not the amount they hold of that stock. As well as the fact that you do not see how long that portfolio manager generally holds the stock without constantly crawling that site daily. The portfolios holdings are only updated at the end of the day. So you can see recent purchases but you cannot see when they sell them until the day after.

You have been doing this for 6 months, you could throw a dart in this market and make money. Long-term though, you will be humbled if you try and "time" the market. I was a trader for three years, and now I only invest. When investing, value is all that matters. Not just metrics, but value. Ask yourself, how much would this company be sold for in a buy out. Typically, you should try and hold a stock for at least a year, unless something fundamentally changes, as the tax benefits for long term cg is much better.
Thank you for describing such a clear learning path!