Investor Quote of the Week

Quote Meaning

Forecasting the market is a fool's game.

Nobody knows when the bottom is. Stocks can always go lower.

This is why it’s important to invest with a margin of safety.

As an investor, you must come up with a range for what you believe a company's fair value is.

You need to back up your hypothesis with real data, not from lazy, overpaid analysts at sell-side banks.

Value stocks based on earnings, cashflows, and how much you, as an owner of shares, are likely to receive in the long run given the company’s operating history.

Only fools and economists try to forecast the market.

Some get lucky, but most fail miserably in doing so.

Nugget of Wisdom

Investing is boring.

It is no secret that Warren Buffett has made the most money by sitting in his chair and reading companies' annual reports.

He reads most of the day with blinds shut in his quiet office in Omaha, Nebraska, far away from the likes of New York.

Investing is a boring game.

Once you invest in a company’s shares, you need to leave them alone.

The secret to Warren Buffett’s success is that he’s willing to wait on the sidelines and hold cash before he swings big.

Once he pitches, he sits tight and waits for the magic of compounding to happen.

Most investors fail because they unnecessarily disrupt the compounding process.

They listen to the news, hear what their friends say, or want to trade in and out of the stock, trying to time the highs and lows.

I’ve been there, too. And have been burned in the process.

Leave your stocks alone.

Thank me later.

Mistakes to Avoid

Leverage can kill.

Leverage is what makes investors go mad.

Margin calls at banks have been a common theme the last few weeks.

Investors who bet too much and borrowed money to fund stock purchases were the first to lose.

If you lack experience, avoid investing with borrowed money.

When stocks drop significantly, it can lead to major disasters.

Do not invest more than you can lose. It’s plain and simple.

If you do, that would be a form of gambling, not the right way to invest.

Stock of the Week

S&P Global Inc (Ticker: SPGI)

Company Description

S&P Global, Inc. engages in the provision of transparent and independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. It operates through the following segments: Market Intelligence, Ratings, Commodity Insights, Mobility, Indices, and Engineering Solutions.

The company was founded by James H. McGraw and John A. Hill in 1917 and is headquartered in New York, NY.

Profitability Metrics

5-year average EBIT margin: 45%

5-year average net-income margin: 31%

5-year average return on capital (TTM): 20%

Growth Metrics

Revenue growth 5-year average (year-on-year): 15%

EBIT growth 5-year average (year-on-year): 11%

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