Before I began buying individual stocks, I armed myself with basic principles on stock investing through books and articles. I learned the basic ratios, learned how to read balance sheets and income statements.
I also learned that controlling ones emotions is important when you invest in the stock market. I knew that decisions based on emotions will probably result in a unsatisfactory return. I needed to find a way to prevent myself from getting carried away by my emotions especially during high volatility in the market. I compiled a list of investment principles from successful investors to guide me in my investment decisions.
- "Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner."
- "I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."
- "Rule No.1 is never lose money. Rule No.2 is never forget rule number one."
- "Wide diversification is only required when investors do not understand what they are doing"
- "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
- "Be fearful when others are greedy. Be greedy when others are fearful."
- "Never bet on comeback while they're playing "Taps"."
- "If you like the store, chances are you'll love the stock."
- "Never invest in any idea you can’t illustrate with a crayon."
- "In the short run, the market is a voting machine but in the long run, it is a weighing machine."
- "It is not the profit margin of the past but those of the future that are basically important to the investor."
- "If the job has been correctly done when a common stock is purchased, the time to sell it is - almost never."
- "Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria”