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šŸ° What Buffett thinks about stock market crashes

www.compoundingquality.net

šŸ° What Buffett thinks about stock market crashes

#QualityTuesday

Compounding Quality
Feb 21, 2023
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šŸ° What Buffett thinks about stock market crashes

www.compoundingquality.net

Quality Tuesday

In this series, we will teach you 5 things about the stock market in less than 5 minutes.

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1ļøāƒ£ Market corrections offer opportunities

Market corrections offer great opportunities for true investors.

Here’s what Warren Buffett thinks about stock market corrections:

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2ļøāƒ£ Never invest in IPOs

Do not invest in IPOs.

From 1968 through 2000, a buy-and-hold strategy on IPOs underperformed the index in 29 out of 33 years.

ā€œIPO: It’s Probably Overpriced.ā€

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Source: Stocks for the Long Run - Jeremy Siegel

3ļøāƒ£ One simple investment quote

Terry Smith’s investment philosophy is simple:

  1. Buy good companies

  2. Don’t overpay

  3. Do nothing

The best investors think like an owners.

ā€œIf you are a long-term investor, you should own high-quality stocks and close your ears to those who say a rate rise will cause you problems. If you are not a long-term investor, I wonder what you are doing in the stock market at all, and so will you one day.ā€ – Terry Smith

The key trades Terry Smith has been making in recent months

4ļøāƒ£ The best investment visuals

Visuals are a great way to learn about stocks.

Here are 15 timeless investing visuals:

Twitter avatar for @QCompounding
Compounding Quality @QCompounding
15 timeless investing principles, visualized: 1. Not investing is risky:
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1:38 PM āˆ™ Feb 12, 2023
5,515Likes1,410Retweets

5ļøāƒ£ Example of a Quality Company

Arista Networks provides cloud networking solutions for data-centers and computer environments.

  • Profit Margin: 28.5%

  • ROIC: 29.4%

  • Earnings Yield: 3.5%

  • Exp. yearly EPS Growth (3 yr): 22.9%

  • Insider ownership: 15.5%

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About the author

Compounding Quality is a professional investor which manages a worldwide equity fund with more than $150 million in Assets Under Management. We have read over 500 investment books and spend more than 50 hours per week researching stocks.

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šŸ° What Buffett thinks about stock market crashes

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20 Comments
Eric Jurado
Writes The International Investor
Feb 21Liked by Compounding Quality

Received your email. Thanks for this quality Tuesday and all the previous quality Tuesdays. Always very insightful and are good reminders to stay the course. Please keep it up and I look forward to receiving more.

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Kevin Woo
Feb 21Liked by Compounding Quality

Sadly, I must agree with the observations about IPOs. Took me 20+years to learn this lesson.

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