🏰 What Buffett thinks about stock market crashes

#QualityTuesday

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.”

Source: Stocks for the Long Run - Jeremy Siegel

3️⃣ 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.

“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:

Compounding Quality @QCompounding

15 timeless investing principles, visualized: 1. Not investing is risky:

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.