If you are trying to get the things you need, it helps to know a simple rule of economics. Buy low, and sell high. If you buy when prices are high, you are going to be losing out to the competition. You will not be getting what you need. If you buy when prices are low, you will be getting what you need at a good price level. Many people make the mistake of piling into the stock market as it is soaring. As they see Apple stock roaring up, they gleefully pile in, ignoring the high cost to buy popular stock. The next thing that happens is the stock tanks, taking their hard earned money with it.
This is not how you make money. A shrewd investor looks at a high value stock at a low price. This investor ignores popular biases and prejudices in evaluating the stock. Good investing exploits the fears that people have, according to Warren Buffett. Identifying the common fears that plague human beings can show the path to success. Your peers are avoiding opportunities because of irrational feelings about certain situations. If you can identify what opportunities they are missing, you can profit from them.
A wise investor looks at the company behind the stock, not the stock’s price level. Once they find a quality company, they buy the stock during a period of recession. When everyone else is screaming to get out of the market, the shrewd investor piles in. They then profit the next time the market goes up. And the market is guaranteed to go up if the stock was for a company or commodity with lasting value, such as gold, land, seeds, or food. Warren Buffett’s rule is to only buy something you would be happy to have 10 years later.
Martin Lustgarten is an investment professional who is in the business to make you and your company happy. You might be wondering how you can get out of the cycle of debt slavery, and into the skyscraper of success. Martin Lustgarten collects tools from the wisest in the investment industry to share with his clients.
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