🏰 5 Things I wish I knew about the stock market 20 years ago.
1️⃣ The impact of taxes on compounding
Costs and taxes hurt your investment results. Try to postpone paying taxes as long as possible.
1️⃣ The impact of taxes on compounding
Costs and taxes hurt your investment results. Try to postpone paying taxes as long as possible.
2️⃣ The power of big tech
Today, Apple’s market cap is equal to the sum of the bottom 180 companies within the S&P 500.
Don’t focus solely on big tech. Small cap stocks outperform the market in the long term.
Today, Apple’s market cap is equal to the sum of the bottom 180 companies within the S&P 500.
Don’t focus solely on big tech. Small cap stocks outperform the market in the long term.
3️⃣ Don’t use debt to buy stocks
Every debt is ultimately paid, if not by the debtor, then eventually by the creditor." - James Grant
Every debt is ultimately paid, if not by the debtor, then eventually by the creditor." - James Grant
4️⃣ Inflation harms your wealth
The best way to protect yourself against inflation is buying quality stocks with high gross margins.
Warren Buffett summarizes it beautifully here:
The best way to protect yourself against inflation is buying quality stocks with high gross margins.
Warren Buffett summarizes it beautifully here:
5️⃣ Example of a Quality Company
Automatic Data Processing is a global provider of business outsourcing solutions (human resource, payroll, taxes, …).
The company has a free cash flow margin of 17.7% and should be able to grow its FCF with 15% per year until 2025.
Automatic Data Processing is a global provider of business outsourcing solutions (human resource, payroll, taxes, …).
The company has a free cash flow margin of 17.7% and should be able to grow its FCF with 15% per year until 2025.
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