Originally Posted by
mispoken
The investing part is what has really propelled my wealth. Long term, buy, hold and never sell. Winners you hold are what really gives your PF a leg up. Losers wither up and die and become an insignificant part of your PF. Ignore metrics like p/e, p/s, EPS and look more at the business you’re investing in. Companies like AMZN, TSLA, NFLX etc get missed when these screens bias them out. Those are the true gems.
As for options, that’s been generating income (albeit not consistently month to month). It’s been used to pay bills, pay down debt and save. I’ve definitely fallen into the category of closing out a position and opening a new position with the spoils of the previous one vs sweeping profits into savings and to pay taxes (which suck when you’re doing this, tough check to write quarterly). But, these are good problems to have.
I tell folks investing is like Turkey recipes, many different techniques make a delicious Turkey. Find a style that fits you and stick with it. For me I was attracted to value investing after reading the Intelligent investor by Ben Graham. I search around the globe looking for stocks that trade at least 25% below their Liquidation value(Margin of Safety).
These type of stocks are commonly known as Net Nets or Cigar Butts(usually companies that trade at these depressed valuations are poor businesses so you're getting one last puff out of them) . I hold the stock until they reach their Liquidation value, sell them(unless in the rare case I can project the company's long term earnings with conviction), Rinse and Repeat. With this strategy I expect at least a 25%+ annual returns over the long term and right now averaging 30%+. Warren Buffet averaged 50%+ using this strategy in the early days of the Investing Partnership he ran but several of the Net Nets he invested in he was able to obtain a board seat and drive shareholder returns.
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