Monday, November 10, 2008

Charlie Munger's Wisdom

Long, interesting article about -
Worldly Wisdom and The Art of Stockpicking.


A bear market with indexes really low, can be a great opportunity for an investor. As of today, we do have bear markets, but it's still not certain if we have reached the bottom. History teaches us, when the bear phase changes to bull, and indexes start to jump 30% 0r 40% or even more, there are only 10% of the overall companies that contribute to this bullish index jumps.

What this means for an investor is that, when the investor invests in the stocks, she/he hopefully chooses the winners! Those 10% winners, that contribute to the bullish jumps when market phase changes...

Wednesday, November 5, 2008

Businessman and Investor

""Being a businessman makes me a better investor and being an investor makes me a better businessman. Most businessmen limit themselves to their own field, and most investors don't really think about businesses. And many businessmen are semi-oblivious to the yardsticks other people use outside that field. I'm always comparing everything to everything else. The question I want to answer is. 'Where do we get the most for our money in something we can understand?'"
- Warren Buffet in an article on WSJ

Stock Price Monitoring

"The stock price is the least useful information you can track, and it's the most widely tracked!"
-Peter Lynch in 'One Up on Wall Street'

Tuesday, November 4, 2008

Virtual Portfolio

You can make your virtual portfolio and monitor it as the time progresses. This might help students like myself who have not yet gained confidence in investing. And yes, as you read those good books, you can follow up the examples with practical application in the virtual environment using these wonderful tools. Some websites that provide such tools are -, I am going to try:
My Portfolio

Buffet's Secrets

This article is provides some insights and the views of a Warren's critic....

How Buffet Does it?

Investopedia has summarized Warren's stock picking methodology in the following manner:
1. Has the company consistently performed well?
[Return On Equity (ROE) = Net Income / Shareholder's Equity]
2. Has the company avoided excess debt?
[Debt/Equity Ratio = Total Liabilities / Shareholders' Equity]
3. Are profit margins high? Are they increasing?
4. How long has the company been public?
5. Do the company's products rely on a commodity?
6. Is the stock selling at a 25% discount to its real value?

You can read the whole article on the investopedia website.

Warren Buffet's Portfolio

Checkout where the master has invested:

Quick everyday reads

Links which might be helpful for students or newbies like myself:
WSJ's Market Watch
Personal Finance - Investing on WSJ