The best way I know to get rich long-term is to invest prudently and conservatively and not try and get rich quick but try and get rich slowly, basically.
I think that most people who complain about our government have no idea what they're talking about because they've never been to a country with a bad government.
To a large extent, equity investors put their hard-earned capital into the hands of management and count on it being employed skilfully and honestly. When that doesn't happen, losses typically follow.
There is a natural tendency for investors to devote a significant majority of their time to finding new ideas. After all, uncovering great companies selling at great prices is the lifeblood of successful investing. But in the never-ending quest for the next great idea, investors often give short shrift to their existing investments.
Just because a company's future is highly uncertain doesn't mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain but have little risk of permanent capital loss.
It's difficult to fix a truly broken business, but when it happens, the returns can be extraordinary.
When high-growth companies slow down, growth and momentum junkies often sell indiscriminately, which can create great opportunities for value investors. Just be careful not to anchor on the stock's previous price or earnings multiple, which are no longer relevant.
One can't be a successful investor without a healthy dose of confidence. To commit your own and others' hard-earned capital requires conviction, and conviction requires confidence. But as with fine brandy or coffee ice cream, too much of a good thing can be problematic.
I'd say the general outline of a sound investment approach is, first of all, you have to decide are you going to try to be an investor yourself? The answer for most people is probably they shouldn't try. You should put your money in index funds and not try to be a stock picker.
If I bring to light a company that's poisoning customers, defrauding investors, or something like that... there just aren't enough regulators in the world to keep up with all of the fraud and malfeasance that goes on out there, particularly in the little nooks and crannies of the market.
One of the best places to look for value is what I call 'babies thrown out with the bathwater' - in other words, scour the most out-of-favour sectors for good companies whose stocks have been crushed due to overblown concerns about the industry that do not, in fact, have an impact on the company.
It's human nature: for most investors, the pain of stocks going down is more tangible than the joy of when they go up. The common impulse is to do something - anything - to minimise the pain.
The consequences of overestimating a company and your ability to analyse it are greatly diminished when you're paying a lot less for it than your analysis shows it is worth.
Mueller is the leading North American provider of water infrastructure and flow control products - things such as fire hydrants, valves, pipes, fittings, and couplings. While this is no doubt a mundane business, it is also an excellent one.
Without doubt, timely and democratic access to financial and market information contributes to smoothly functioning financial markets.
Small-company stocks, like any asset class, can get picked over from time to time, but there are fundamental reasons why diligently mining them with an eye for unrecognised value can get market-beating returns.
No one would suggest completely ignoring news about your investments. Enron investors, for example, would have been well served to sell once early reports of accounting irregularities surfaced. But the key is to keep news in context and act only if further reflection or study indicates that the core thesis for an investment has changed.