Five Things You Need to Know: The Market Ahead, Valuation Tools, Alive and Kicking, Dividends Rule!, Get Global
Say hello to the rest of the world.
Editor's Note: While we congregate in Vail for Minyans in The Mountains 3, we asked each Professor to prepare some thoughts on fiscal literacy, how to listen to the market and their area of expertise.
While in the process of writing a book that should be in the bookstores sometime 2007 the following things come to mind about investing in the market ahead of us.
1) The market ahead of us is likely to be a range bound one, similar to the 1966-1982.
2) Relative valuation tools will require a substantial recalibration. The absolute valuation tools should have a veto power over the relative valuation ones.
3) Buy and hold is dead! Buy and sell is very much alive and kicking.
4) Dividends rule! – Higher dividend yielding stocks should become a more predominant portion of one's portfolio.
5) Say hello to the rest of the world. International stocks should occupy a large portion of an investor's portfolio.
- I am a long-term investor. This doesn't mean that I'll buy a stock and forget to sell it, which is stock collecting.
- Long-term investing is more of a reflection of my attitude towards investing than a time horizon.
- I approach company analysis as a business owner would analyze a business he was about to buy.
- I am not afraid of being contrarian, but a contrarian is not an investor who has brevity and stupidity to step in front of the train, but the investor who is willing and able to think independently of the crowd.
- I am willing to think independently.
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