Investing – What Matters

Much of investing is about common sense.

It is the consistent and disciplined application of the principles that sets a good investor apart.

You might have heard us talk about seeking out “out-of-favour” stocks and eschewing what the market considers “fashionable”. You might have read about the “divergence between a company’s intrinsic value and its share price”. But what does all this mean? And how is it put into practice?

<p>It is the consistent and disciplined application of the principles that sets a good investor apart.</p>

<p>You might have heard us talk about seeking out “out-of-favour” stocks and eschewing what the market considers “fashionable”. You might have read about the “divergence between a company’s intrinsic value and its share price”. But what does all this mean? And how is it put into practice?</p>

Mistaken Equation

A good company doesn’t necessarily make a good investment.

It’s all about the price you pay.

Dollar Cost Averaging

Shoes that don’t fit are never a bargain, not even at a sale.

Do you really want to top up a holding just because the share price is down?

Random Moves

The underlying value of businesses changes slowly, yet share prices gyrate daily.

This apparent contradiction results from the undue weighting of recent events.

Fashion Victims

Life without fashion would be rather dull.

The share market merrily embraces fashion too, but it’s cruelly fickle. Following the latest fad often proves lethal.

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