Quality Tuesday
In this series, we will teach you 5 things about the stock market in less than 5 minutes.
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1️⃣ Market corrections offer opportunities
Market corrections offer great opportunities for true investors.
Here’s what Warren Buffett thinks about stock market corrections:
2️⃣ 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.
“IPO: It’s Probably Overpriced.”
3️⃣ One simple investment quote
Terry Smith’s investment philosophy is simple:
Buy good companies
Don’t overpay
Do nothing
The best investors think like an owners.
“If 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.” – Terry Smith
4️⃣ The best investment visuals
Visuals are a great way to learn about stocks.
Here are 15 timeless investing visuals:
5️⃣ 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.
Sadly, I must agree with the observations about IPOs. Took me 20+years to learn this lesson.
Another excellent quality Tuesday article. From the comments I can see you’re intending on publishing an article this Thursday about valuation - I’m really excited to read this! Joe.