Thursday, 16 April 2015

The Real Investing Formula

I have come to discover that the real investing formula is not some long elaborate square root base of some letters combined for a PhD in mathematics, but it is a rather simple set of basic principles.

Certainly not PhD maths for investing formula = (x+a)^n = _(k=0)^n〖(n¦k) x^k a^(n-k)

The real investing formula lies in;
  1. Recognizing the value of an investment opportunity and paying less than it's worth for it
  2. Applying basic maths i.e addition, subtraction, division and multiplication 
  3. Being patient for that investment opportunity to show up at the right price
  4. Safe guarding against permanent loss of capital (margin of safety) +Seth Klarman
  5. Understanding what you are investing in
  6. Keeping the investment approach real simple
  7. Accepting that you will make mistakes.
Seth Klarman on Margin of Safety
  1. Focus InSight: Keep it simple

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Feel free to ask questions and make comments.

FII

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