• Successful investing depends on personal discipline, not on whether the
crowd agrees or disagrees with you. That's why it's crucial to have a solid,
"well-grounded investment philosophy.
• Don't buy a stock unless you understand the business inside and out.
Taking the time to investigate a company before you buy the shares will
help you avoid the biggest mistakes.
• Focus on companies with wide economic moats that can help them fend
off competitors. If you can identify why a company keeps competitors at
bay and consistently generates above-average profits, you've identified the
source of its economic moat.
• Don't buy a stock without a margin of safety. Sticking to a strict valua
tion discipline will help you avoid blowups and improve your invest
ment performance.
• The costs of frequent trading can be a huge drag on performance over
time. Treat your stock buys like major purchases, and hold on to them for
the long term.
• Know when to sell. Don't sell just because the price has gone up or down,
but give it some serious thought if one of the following things has hap
pened: You made a mistake buying it in the first place, the fundamentals
have deteriorated, the stock has risen well above Its intrinsic value, you can
find better opportunities, or it takes up too much space in your portfolio.
