viernes, 23 de octubre de 2009

Market evolution. Jorge de Lalama. Chapter V. The intelligent investor Benjamin Graham. Part VI.

For a person who will invest in the coming years, the fall in stock prices is good news, not bad because you can buy more for less. The longer and steeper the fall, and the greater the evidence of their purchases during this fall, more money will end up winning in the end, if it remains firm. Instead of fearing the bear market should welcome him.

We have a biological tendency to buy at high prices and sell at low prices. It is necessary to implement the technique of the average monetary cost of overcoming addiction and prediction.

In a series of interesting experiments in the late 1980s, a psychologist at Columbia and Harvard, Paul Andersen, showed that investors receive constant feedback on the progress of its performance obtained half the investors who received no news respect.

I thank the Milesian woman who, seeing the philosopher Such continually occupied in the contemplation of the sky and with our eyes upturned, and put him on his way to stumble, for warning that it is time to take his thinking things in the clouds when he has provided those who were at his feet. Certainly I would advise you look more to himself than to heaven. Michael Montagne.

With high interest rates the option of investing in bonds is more attractive.

Five key elements for choosing a company:

"The overall long-term prospects of the company.

"The quality of its management.

"Their financial strength and capital structure.

"His track record of dividends.

And its current dividend rate.

Disadvantages of companies:

"Buy shares of other companies rather than invest in their own business.

"Resorting to foreign money to finance (cash from financing activities) with the placement of shares through stock splits.

"That the results are dependent on one customer.


"Having a competitive advantage as the brand identity, monopoly, scale economies, only goodwill and resistance to substitution.

"The revenue should grow so strong and sustainable long-term rate of 10% before taxes and between 6% and 7% after taxes.

"The company should spend its money to promote new activities.

"Spending on research and development. R & D.

The long-term debt should be below 50% of total capital.

Companies should buy back its shares when they are cheaper.

Selection for the defensive investor:

1. Appropriate size of the company.

2. A sufficiently strong financial condition. Ratio current assets / current liabilities> 2.

Net debt less than 50% equity.

3. Stability of the benefit.

4. History uninterrupted dividends for the past 20 years.

5. Profit growth between 6% and 7% after tax as a minimum.

6. PER less than 15.

7. Share price should not be more than 1.5-fold increase in net assets and a PER less than 15. Are excluded too small or too large over-indebted companies and do not have a long history of dividend payment.

The efficient markets hypothesis is a theory that the price of each share incorporates all the information relating to the company that is publicly available. With millions of investors looking to the ends of the market every day, it is unlikely that serious errors of prices last a long time.

The estimates of so-called experts are less reliable than tossing a coin.

Working capital = Current assets-liabilities.

Working capital must exceed the long-term debt.

You have to buy cyclical companies such as steel, perhaps, when the prevailing situation is unfavorable, the near-term prospects are poor and low price fully reflects the prevailing pessimism.

The tendency of stocks of smaller companies to be inferior in periods overvalued market bulls, and not only suffer the most serious setbacks of the most solid companies in the following market downturns, but also its tendency to delay their full recovery in many cases indefinitely.

Goodwill is the price that exceeds the book value or heritage.

We always buy below the net asset value or book value.

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