DIY Investor Magazine
/
2015 Issue
43
5. BE WARY OF OVERAMBITION
Beware companies that stray from their core
business or territory. Top line growth may be good for
stakeholders but rarely for small shareholders.
6. THINK LONG TERM
think long term and focus on a company’s long-term
business prospects.
7. DEVICES NOT PORTFOLIO CONSTRUCTION
TOOLS
Mimicking an index is buying because someine else
has. To beat the benchmark you must deviate from it.
8. TAKE ADVANTAGE OF IRRATIONAL
BEHAVIOUR
Markets are irrational, think of a 20% fall in a share
price as an opportunity to buy cheap.
9. DO YOUR OWN RESEARCH
Not following others is the key to success. Do your own
analysis and coming to your own conclusions.
10. FOCUS ON INDUSTRIES IN WHICH IT
IS POSSIBLE TO HAVE A SUSTAINABLE
COMPETITIVE ADVANTAGE
Some industries produce more economic profit than
others. High entry barriers can therefore provide a
sustainable competitive advantage for incumbents.
