Also, it's not just the math -- it's the data. Successful investors spend large amounts of time every day poring over financial reports to find companies whose stated value is different than their actual value. That's not something really teachable; you just have to want to sit there for hours doing it.
Its really easy. You find companies with trustworthy management and sound businesses, look at their growth, find a reasonable discounted expected future growth, then calculate the net present value of discounted future growth. If the stock is trading for that amount, then you pass. If the stock is trading at a discount to that, then you buy.
Those who think the market is efficient are saying that there are no stocks like that... but if you look around, its not hard to find them.
When I was a buy and hold investor, I made %50-%100 returns each year spending about 5 hours a year in investigation (and most of that was just because I liked checking out possibilities. Most of it was fun. Once I'd found the keepers, it took me an hour each year - about 15 minutes each quarter- to update the numbers in the spreadsheet.)
Comments
Also, it's not just the math -- it's the data. Successful investors spend large amounts of time every day poring over financial reports to find companies whose stated value is different than their actual value. That's not something really teachable; you just have to want to sit there for hours doing it.
Its really easy. You find companies with trustworthy management and sound businesses, look at their growth, find a reasonable discounted expected future growth, then calculate the net present value of discounted future growth. If the stock is trading for that amount, then you pass. If the stock is trading at a discount to that, then you buy.
Those who think the market is efficient are saying that there are no stocks like that... but if you look around, its not hard to find them.
When I was a buy and hold investor, I made %50-%100 returns each year spending about 5 hours a year in investigation (and most of that was just because I liked checking out possibilities. Most of it was fun. Once I'd found the keepers, it took me an hour each year - about 15 minutes each quarter- to update the numbers in the spreadsheet.)