To Invest or Not to Invest?
When making decisions about a company it is vital to asses not just if they are making profits but if they are generating a suitable return on equity for you, the shareholder. Imagine a business XYZ you invest 10million of your money into it. By the end the year it is made a net profit of 5 million. Pretty good; a 50% return on equity is a business I would like to invest in. Basically this is the golden key to value investing. Avoid the newspapers. This is how I invest and this is what works for me.
Technical analysis requires to much "if this goes up it will do this" and "if this breaks through it will do this". Regularly I frequently hear analysis say this keyword "IF". For me, I don't like "IF", I like a sure thing. This is why finding good quality businesses, with a proven track record of success is the best way to financial success.
Our aim as value investors is to find quality businesses at discounts to their intrinsic values.