8 Lessons from the exceptional book Common Stocks and Uncommon Profits:
1. Buy moats with growth
Invest in companies that are able to grow at attractive rates.
Furthermore, they should have a moat that prevents newcomers to share in that growth.
Invest in companies that are able to grow at attractive rates.
Furthermore, they should have a moat that prevents newcomers to share in that growth.
2. Focus on buying moats with growth when they are out of favor
Price is what you pay, value is what you get.
Try to buy wonderful businesses at a fair price.
Price is what you pay, value is what you get.
Try to buy wonderful businesses at a fair price.
3. Let your winners run
The best time to sell a great company is almost never.
Never sell the most attractive stocks you own for short-term reasons.
The best time to sell a great company is almost never.
Never sell the most attractive stocks you own for short-term reasons.
4. Dividends aren't important
Dividends only make sense when the company has no internal growth opportunities.
The best companies can reinvest a lot in organic growth.
Dividends only make sense when the company has no internal growth opportunities.
The best companies can reinvest a lot in organic growth.
5. Everyone makes mistakes
Sometimes you win, sometimes you learn.
Always keep learning and prevent making the same mistake twice.
Sometimes you win, sometimes you learn.
Always keep learning and prevent making the same mistake twice.
6. There are only a small number of outstanding companies
Compounding machines are very rare.
Once you've found one, hold on to dear life.
Compounding machines are very rare.
Once you've found one, hold on to dear life.
7. Management matters
Invest in companies where management is not running the business for the money, but because they love what they do.
Show me the incentive and I'll show you the outcome. Skin in the game matters.
Invest in companies where management is not running the business for the money, but because they love what they do.
Show me the incentive and I'll show you the outcome. Skin in the game matters.
8. Success = Hard work + intelligence + honesty
If you're passionate about stocks, you'll do great without doubt.
The future will largely belong to those who, through self-discipline, make the effort to achieve it.
If you're passionate about stocks, you'll do great without doubt.
The future will largely belong to those who, through self-discipline, make the effort to achieve it.
That's it for today.
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Think about all writings of Buffett, Damodaran, Mauboussin, and much more.
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