Chapter 5 - Stock Picking (Putting it All Together) Flashcards
“Find out where the people are going, ___ ___ _____ _____.”
–Mark Twain
“Find out where the people are going, and get there first.”
–Mark Twain
“Every potentially great company emerges and experiences a lot of _____ along its path to success.”
“Every potentially great company emerges and experiences a lot of volatility along its path to success.” – p 120
“The real job of individual and professional investors is to ______ ____ __ ________–15 percent at most–from all the information available and learn how to use it.”
“The real job of individual and professional investors is to select what is relevant–15 percent at most–from all the information available and learn how to use it.” – p121-122.
What is the best investment strategy an investor can have?
“Relying on instinct, homework, and knowledge is the best investment strategy you can have, and that an investor should pick carefully what to extrapolate and what not to.” – p127
Why was Dekalb-Pfizer Genetics a successful investment?
Two reasons
- Farmers trusted the company.
- The company focused on activities to build up farmer trust - The price of the seed they sold represented a very small cost to the farmer.
–p129-130
What is better than being first or fast?
Being right on BASM
-p138
With regards to coming out with new products, what is more important–speed or repeatability?
Repeatability.
- p138
Most companies are not _____ _____.
Most companies are not marathon runners.
*** so keep monitoring their strategy, business model, performance, competition, etc. Keep reading articles and annual reports even when you are happy with your big gains. Take appropriate action when you see developments. ***
Great companies keep on _____ ______ _____ _______.
Great companies keep on exceeding estimates and expectations.
–p 139
Quite often, BASM _____ that companies will do better or fail on earnings estimates.
Quite often, BASM predicts that companies will do better or fail on earnings estimates.
–p139
How did Fred Kobrick make money on Molex, Cisco, Sun and other companies?
He knew the BASM and could predict what would happen.
-p139
Most companies are not going to have the ability of a _____ _____ when it comes to repeatability and extending their success.
Most companies are not going to have the ability of a marathon runner when it comes to repeatability and extending their success.
For example, Sun Microsystems.
Keep reading about competition, management, and how the business model and strategy evelove–keep reading articles and annual reports even when you are happy with your big gains.
