My stock investing principles
Were you forwarded this email from someone else? If so, subscribe for yourself. I send this email to subscribers up to 3x per week.
If you read the Do you want to look good or make money? newsletter from earlier in the week, you know I believe in Buffett’s and Pabrai’s strategy of being a shameless cloner.
In William Green's book Richer, Wiser, Happier, he wrote, "Pabrai's success both as an investor and a philanthropist is built entirely on smart ideas that he has borrowed from others." Pabrai has openly admitted, "I'm a shameless copycat. Everything in my life is closed ... I have no original ideas."
With that said, you can probably imagine that my investing principles aren’t ones I’ve created myself. I’ve collected the best of what I’ve learned from other successful investors and added them as my own investing principles to follow. I’ve cloned the ones that speak to me.
I want to share those investing principles with you today.
The list below is not complete. I’m not sure my list of investing principles will ever be complete. My principles, philosophy, and strategy are ever-evolving. It is possible, and likely, that I will find a new principle to clone tomorrow from another successful investor, at which point the list will grow.
As of today, my stock investing principles are as follows:
If I don’t have an edge, I don’t play.
You should buy a stock only when it’s selling for much less than your conservative estimate of its worth. It doesn’t take an elaborate Excel spreadsheet to see it's undervalued.
Do not trade for the sake of trading. Investing is mostly a matter of waiting for rare moments when the odds of making money vastly outweigh the odds of losing it. Be patient and selective, saying no to almost everything.
Fish where there are fish, but few fishermen.
The company must be within my circle of competence. Avoid anything that is too hard.
Buy good businesses, not merely cheap stocks.
Exploit the market’s bipolar mood swings.
Make a small number of mispriced bets with minimal downside and significant upside.
What are your investing principles? What would you add to this list?
All the best,
Sponsored By
Norwood Energy drills and operates, profitably, oil & gas wells with a 90% success rate. A disciplined and economically-efficient approach provides investors the opportunity to benefit from a lower price point than most industry-level deals.
Hear more about Norwood Energy’s business here, or contact them directly at (817) 600-4246.
You are receiving The Leonard Letter because you either signed up or you attended an event/webinar that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable.
Nothing in this email is intended to serve as financial advice. Do your own research.
