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Value Investing
Simplified
We’ve heard the term “Value Investing” many times, however, what does it mean really ?
Let me break it down to you into 5 parts.
Growth
Stock Price
Debt Level
Dividends
Dividends Growth
A strong growth company like AAPL, NVDA, MSFT, GOOGL, META, NFLX, AMZN and TSLA can be bought at a “fair price”, meaning people don’t mind paying extra for the future growth of the company.
A slow growth company like VZ, KO, JNJ, CL, PEP, WMT, MCD, SBUX needs to be bought at a “cheap price” . Why? Because the company itself probably already has reached its maximum customers, therefore, it can’t grow anymore, so it will start to pay your high yield dividends.
The first step of Value Investing is to identify which stage a company is at.
Is it at the growing stage, mature stage or the dying stage ?
Once you have identified this, now you just need to wait for big big crash, buy up the entire company (remember the META crash in 2022 ?), and go to sleep while doing NOTHING. Then your company will take care of itself.
“When you take care of the downside, the upside follows.” - Warren Buffett
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