Tutorial 21-25 Recap
1) FORECASTING - The Investment Masters understand the folly of forecasts. Do not rely on economic, FX, stock market, commodity or interest rate forecasts to underpin your investment decisions. Base your investment decisions on price versus intrinsic value. The next time a financial commentator or stock market guru provides a forecast ask for their forecasts from the previous five and ten years. The difference between the Investment Masters and market forecasters is skin in the game!.
2) TURNING ON A DIME - markets can turn abruptly in unexpected ways. This tends to be a result of crowd psychology which can cause prices to deviate significantly from intrinsic value.
3) PESSIMISM - the best time to BUY stocks is when investors are pessimistic as it is more likely the bad news has been discounted into the prices of stocks.
4) WEAK MARKETS - Weak markets provide the opportunity to buy quality stocks at cheap prices. The higher a market trades the more likely future returns will be weak and vice versa. In almost all situations outside financial markets people like to buy things when they are on sale. Investors take the reverse approach. They should buy their stocks like their groceries, when they are on sale.
5) TIPS - the Investment Masters don't rely on tips. You don't need investment tips to produce attractive long term compound returns.