Some investing principles

• Investing
• Ben graham says you don't have to do extraordinary things to do get extraordinary results. Keep it simple.
• Give the kid a hammer n everything starts looking like a nail.
• Don't own a stock that would cause you to panic and dump your shares if the price falls by 50%
• Think 10 yrs rather than 10 minutes, if you cant hold the stock for a decade, don't buy it in the first place
• Investing is where you find a few great companies and sit on your ass
• Don't be contrarian for the sake of it
• Better to hit singles n doubles regularly than to strike out swinging for the fences
• Make a list of your top companies n the max prices u will be willing to pay for them. Wait on the sidelines for opportunities
• Shun the ticker. Turn off the noise. Study the playing field n not the scoreboard. Ben graham says, "in the short run, mkt is a voting machine, but in the long run it is a weighting machine"
• Don't swing at every pitch
• Mistakes of commission are worse than mistakes of omission
• Omission - missing a multibagger - discipline in action
• Commission - investing in losers - reflects breakdown of discipline
• Don't get distracted by macro issues, focus on what you know ie the workings of the business
• Stay within ur circle of competence
• Volatility - Mr market's dramatic mood swings creates opportunities .. look for those with significant margin of safety
• Be greedy when others r fearful; be fearful when others r greedy
• Read a lot

• What to look for
• If you don't understand a business don't buy it
• Differentiate between a volatile stock and volatile business
• Mkt caps r a measure of co's clout n borrowing power but cash in the door qtr after qtr matters more
• Look for companies with favourable long term prospects run by honest n competent mgt
• Look for a business that has been doing the same thing that it was doing a decade ago. Why
• It had plenty of time to figure out how to get things right
• Co. has likely found a niche
• Look for economic franchises - cos which provide products
• Needed or desired
• Not overly capital intensive
• Seen by its customers to have no close substitutes
• No price regulation
• Look for companies with moats - sustainable competitive advantages
• Look for absence of change..old economy ..boring n mundane businesses
• Concentrate - too much of a good thing is wonderful
• If you are on the right flower, stay there. Avoid the temptations of hyperactivity
• Evaluate the mgt
• Frugal or spendthrift
• Repurchases shares/ avoids dilution
• Candid annual report
• If the mgt claims to know the future, earnings projections n growth expectations - bad sign
• If they hit the targets repeatedly - something is being manipulated