What secrets you can learn from the masters of investing

Fsp Invest, 10 Feb. 2014

Tags: masters of investing, investing, warren buffett, peter lynch, john templeton, investor, successful investing, stock market, shares, buying shares, investing strategy, investment lesson, investment,

The sooner you realise that no-one can knows what the stock market will do tomorrow, next week or next year, the sooner you can start making some money in the stock market. That’s a lesson you can learn from three investment greats: Warren Buffett, John Templeton and Peter Lynch. Read on to uncover what you can learn from the masters of investing…

Warren Buffett, Peter Lynch and the late John Templeton don’t have much in common in their approach to investing, Alexander Green in Investment U explains…

But they all didn’t have a clue what the broad stock market was going to do. That was fine. Because they knew someone much more valuable and important than that.

They knew how to identify companies that were selling for far less than their intrinsic worth. And when the market finally came round to their way of thinking and recognised the value, they sold them.

For instance, here are some pointers you can learn from Peter Lynch…

11 lessons from Peter Lynch
  1. Behind every share is a company. Find out what it's doing.
  2. Never invest in any idea you can't illustrate with a crayon.
  3. Over the short-term, there may be no correlation between the success of a company's operations and the success of its share. Over the long-term, there's a 100% correlation.
  4. Buying shares without studying the companies is the same as playing poker - and never looking at your cards.
  5. Time is on your side when you own shares of superior companies.
  6. Owning shares is like having children. Don't get involved with more than you can handle.
  7. When the insiders are buying, it's a good sign.
  8. Unless you're a short seller, it never pays to be pessimistic.
  9. A stock market decline is as predictable as a January blizzard in the Alps. If you're prepared, it can't hurt you.
  10. Everyone has the brainpower to make money in shares. Not everyone has the stomach.
  11. Nobody can predict interest rates, the future direction of the economy or the stock market. Dismiss all such forecasts and concentrate on what's actually happening to the companies in which you've invested.
Lynch's advice could have a profound effect on your stock market approach.

By understanding his investment philosophy you can learn that investment success isn't the result of developing the right macro-economic view or deciding when to jump in or out of the market.

Success is about researching companies to identify those that are likely to report positive surprises.

So there you have it, the secrets you can learn from the masters of investing.

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