A Quote by Walter Schloss
Buy stocks where the outlook is not good.
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So the first thing I learned about how to get superior performance is not to buy stocks that are near their lows, but to buy stocks that are coming out of broad bases and beginning to make new highs.
Investors... can't pick stocks that are better than average. Stocks are a good thing to own over time. There's only two things you can do wrong: You can buy the wrong ones, and you can buy or sell them at the wrong time. And the truth is you never need to sell them.
Before this century is over, the Dow Jones Industrial Average will probably be over one million versus around 10,000 now. So for the long-term, the outlook is tremendously bullish if you buy stocks blindly to keep for a century.
I buy stocks when they are battered. I am strict with my discipline. I always buy stocks with low price-earnings ratios, low price-to-book value ratios and higher-than-average yield. Academic studies have shown that a strategy of buying out-of-favor stocks with low P/E, price-to-book and price-to-cash flow ratios outperforms the market pretty consistently over long periods of time.
Do not buy the hype from Wall St. and the press that stocks always go up. There are long periods when stocks do nothing and other investments are better.
When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 that went to $2, but then they later went to $30. You just don't know when you can find the bottom.
Invest in vanity. Buy stocks in high-profile companies whose products are designed to make you feel good and look good.
In the 1920s you could buy stocks on margin. You could put 10 percent down and borrow the rest against your stocks.
I don't buy stocks, I make stocks.
For the immediate future, at least, the outlook (stocks) is bright.
But my system for over 30 years has been this: When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 that went to $2, but then they later went to $30.
What about stocks? You got to buy them. What if they break? You have to buy the dips.
We like to buy stocks which we feel are undervalued and then we have to have the guts to buy more when they go down.
Each year we buy stocks and they go up, we sell them and then we try to buy something cheaper.
To me 'The Big Easy' is shorthand for owning big stocks that are easy for wary investors to buy into. These stocks tend to outperform during the back half of bull markets.
"If I buy stocks on Smith's tip I must sell those same stocks on Smith's tip. I am depending on him. Suppose Smith is away on a holiday when the selling time comes around?
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