The P/E multiple is often used for stock valuation. This is understandable, as it is relatively easy to use to screen for a potential investment. However, a good understanding of the benefits and pitfalls of multiples is vital before you buy a company solely based on its P/E ratio.
How to invest
How to invest – how super investors like Warren Buffett look at the stock market and analyze stocks. Books and articles are used as references
ETFs (exchange traded funds) that replicate a stock index like the S&P500 are very popular. Index funds are the best investment for most investors according to Warren Buffett. This makes sense if you realize that most professional and expensive fund managers do not outperform the market. Some basic understanding of ETF index investing based on the book of John Bogle – The Little Book of Common Sense Investing and the advice of Warren buffet will help to successful invest in ETFs.
Warren Buffett gave many insights about how he invests in stocks over the years. In the previous article we discussed the investing philosophy and investing principles of Warren Buffett. This article looks at how Warren Buffett invests in stocks by explaining his investment criteria for good businesses. Warren Buffett uses four criteria to determine if …
Understanding the fundamental investing principles of Warren Buffett will help you to better understand the investing process. This article will present the four principles that are recommended by Warren Buffett. Organizing your investment thoughts around these four principles will help in achieving satisfactory investment results. Furthermore, understanding these four fundamentals will help you to better control your emotions and develop the right investing philosophy.