Super Investor’s Investment Rules

super investor’s investment rules

Peter Lynch
  1. If you study 10 companies, you’ll find one for which the story is better than expected. If you study 50, you’ll find 5. There are always pleasant surprises to be found in the stock market.
  2. Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and stock mutual funds altogether.
  3. Your investor’s edge is not something you get from wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.
  4. Over the past three decades, the stock market has come to be dominated by a herd of professional investors. Contrary to popular belief, this makes it easier for the amateur investor. You can beat the market by ignoring the herd.
  5. With small companies, you’re better off to wait until they turn a profit before you invest.
  6. If you invest $1,000 in a stock, all you can lose is $1,000, but you stand to gain $10,000 or even $50,000 over the time you’re patient. You need to find a few good stocks to make a lifetime of investing worthwhile.
  7. In every industry and every region, the observant amateur can find great growth companies long before the professionals have discovered them.
  8. There is always something to worry about. Avoid weekend thinking and ignore the latest dire predictions of newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling.
  9. If you don’t study any companies you have the same chance of success buying stocks as you do in a poker game if you bet without looking at your cards.
Seth Klarman
  1. Invest, don’t speculate!
  2. Avoid paying fees to Wall Street
  3. A value investing strategy is best
  4. Don’t just invest in value, try to find it at a bargain price
  5. Be patient. Opportunities will come to those who look for them
  6. The market is inefficient
  7. Always have sufficient liquidity
  8. Don’t be afraid to average down
  9. Trade and rebalance your portfolio
  10. Know what you’re doing
Warren Buffet
  1. If the business does well, the stock eventually follows.
  2. Most news is noise, not news!
  3. When you buy a stock, plan to hold it forever.
  4. Only listen to those you know & trust.
  5. Understand what you’re investing in.
  6. Be fearful when others are greedy & greedy when others are fearful.
  7. Buy at a price below intrinsic value.
Shows Super Investor's Investment Rules readers what intrinsic value is.
Charlie Munger
  1. Be prepared for a market crash.
  2. Avoid Wall Street culture.
  3. Invest in what you understand with competitive advantage.
  4. Don’t diversify.
  5. Be patient.
Bill Gates
  1. Ignore the noise focus on buying great companies.
  2. Pick good managers!
  3. Take big risks.
  4. Patience is key when investing.
  5. Diversify.
  6. There is huge opportunity in the healthcare sector.
  7. Invest in companies making a difference.
Cathie Wood
  1. Invest in innovation
  2. Invest in high growth sectors
  3. When you see an opportunity, go big on it
  4. Avoid conventional wisdom & invest with conviction
Mohnish Pabrai
  1. Check what stocks super Investors have invested in on a quarterly basis.
  2. Invest in companies that have a strong moat.
  3. You make money by waiting.
  4. Don’t short sell!
  5. Low risk, high uncertainty: How can I minimise my downside?
  6. Have a checklist (created by looking at investor’s mistakes):
    • Can this business be decimated by a low-cost country?
    • Is this a win-win business for the entire ecosystem?
    • Is there too much leverage in the business?
    • Is the management competent enough?
    • Unions?
    • Collective bargaining?
    • How have they failed before?
    • Are these normalised earnings or boom earnings?
Benjamin Graham
  1. Margin Of Safety (profit even when the market falls)
  2. Original Graham Formula for Calculating the Value of a stock
  3. Mr Market is Erratic (take advantage of this)
  4. Find companies that have low P/E & P/B Ratios
  5. Stock price is different to business value.
  6. Knowing a business is not enough

Super Investor’s Investment Rules Conclusion

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