20 Lessons from 20 Years of Investing
by John Rotonti (TMFEarlyRiser)
1 - Pay up for quality.
2 - Average up. Add to winners, not losers.
3 - If you want/need capital, sell your losers.
4 - Remain invested. Stocks go up most of the time, even after new highs.
5 - Keep cash on the side to take advantage of sell offs. Get aggressive with high-quality businesses when on sale
6 - Create a process and stick to it. Checklists/watchlist/journal are great free tools.
7 - Don't bother with low quality or turnarounds. Have a 'too hard' pile.
8 - Stocks follow earnings eventually. Buy long-duration, profitable growers.
9 - Buy 'best of breed'. Don't bother with the second-best.
10 - People build great businesses. Good management is important.
11 - Focus on what can go right AND wrong
12 - High gross margins, pricing power, and recurring revenue = high ROIC, but it is not the only way.
13 - Write it down! If you can't express it with words, you don’t really understand the opportunity.
14 - Remain mentally flexible. Change your mind, especially when the facts change!
15 - Beating the market isn't the only goal.
16 - Concentration is overrated. Buying lots of stocks is a fine strategy.
17 - ESGMatters, IncentivesMatter, CultureMatters
18 - Markets are generally efficient, but not always.
19 - We can win simply by having a much longer time horizon
20 - Take care of your mind and body! #TradingUniversity