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YIS Unit 1 - Lesson 4

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Young Investors Society

on 6 September 2016

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Transcript of YIS Unit 1 - Lesson 4

OVERVIEW
In this lesson you will learn the
OBJECTIVES
LENGTH
20
to
40
minutes
MATERIALS
At the conclusion of this lesson, you should:
Understand the
Seven Golden Rules of Investing
Curriculum, videos and lesson plans.
YIS Website
www.younginvestorssociety.org
YIS Glossary of Terms
www.younginvestorssociety.org/resources
For company research including ratios and screens.
ZACKS
www.zacks.com
For company research including ratios and screens.
MORNINGSTAR
www.morningstar.com
For company analysis.
GURU
FOCUS
www.gurufocus.com
For company analysis and stock graphs
.
Y-CHARTS
www.ycharts.com
For basic stock concepts.
WALLSTREETSURVIVOR
www.wallstreetsurvivor.com
For stock charts and basic company information.
YAHOO
FINANCE
finance.yahoo.com
The Little Book That Beat the Market.
JOEL
GREENBLATT
http://goo.gl/Bx6ED9
Write to the above address if you want help arranging a financial professional to come to your class.
GUEST
SPEAKERS
contact@younginvestorssociety.org
Online portal of stock research reports.
SEEKING
ALPHA
www.seekingalpha.com
Great daily content and stock picks.
MOTLEY
FOOL
www.fool.com
The “Wikipedia” of Investing, great online glossary of terms
INVESTOPEDIA
www.investopedia.com
For tracking stock market performance and comparison between stocks.
STOCKCHARTS
www.stockcharts.com
UNIT
1
THE SEVEN GOLDEN RULES OF INVESTING
|
Lesson 4
THE

SEVEN GOLDEN RULES

OF INVESTING

Handout
1.4
HANDOUT
1.4
Investment
scenarios
LEARNING
ADDITIONAL
RESOURCES
CLICK
on the blue rectangles to get the website and description of the resource
HIT
after watching a resource to return
here

to continue with the Prezi
ACTIVITY
Seven Golden Rules for Investing
and will apply this knowledge to a variety of scenarios.
7
Curriculum, videos and lesson plans.
YIS Website
www.younginvestorssociety.org
RESOURCES
SUPER
INVESTORS
Recap
What
do you remember?
1
rule
for investing that keeps the
super
investors habits in mind
Write
TIME HORIZON
ARBITRAGE
If investors learn to think long-term and can see beyond the daily and quarterly noise, they can gain a real upper hand
- Warren Buffet
Only buy something that you’d be perfectly happy to

hold if the market shut down for 10 years
FUNDAMENTAL
INVESTING
is buying a tangible piece of a business, or a share of that business
AND
your
INVESTMENT
PORTFOLIO
is only as good as sum of the companies in that portfolio.
- Warren Buffet
It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price
GOOD
COMPANIES
have a unique advantage that others can't copy
generate high returns on capital
don't need to borrow a lot because their business is self financing
RULE
1
THINK
LONG TERM
RULE
2
GOOD
COMPANIES
MAKE
GOOD
INVESTMENTS
*(Ditto for bad companies)
RULE
3
BUY WITH A
MARGIN
SAFETY
OF
MARGIN OF
SAFETY
Is formed when one buys an investment at less than its value, while using conservative assumptions
- Mohnish Pabrai
Heads I win. Tails I don't lose much
Dhandho Investor
RULE
4
AND OWN

DO YOUR OWN
HOMEWORK
WHAT YOU KNOW
There is no substitute for your
OWN WORK
LEHMANS BROTHERS
BACK TO BUSINESS
AWS
Stock Advice
LEH
2008
2007
2016
???
-100
-%100
BUY,
Successful investors know
WHAT THEY OWN
They buy stocks of companies with products they
- Peter Lynch
You have to know what you own, and why you own it
RULE
5
- Warren Buffet
Be fearful when others are greedy, and be greedy when others are fearful!
believe in
DON'T FOLLOW
THE HERD
STAY CALM AND RATIONAL
RULE
6
DON'T PUT ALL YOUR EGGS IN

TOO MANY BASKETS
,
ONE BASKET
EITHER
BUT DON'T HAVE
DIVERSIFICATION
is one of the most critical strategies for your portfolio so that if
one stock blows up, it won't sink the entire ship
of diversification benefits can be obtained in most markets with a portfolio of just over
20 stocks
90
%
Research
suggests that
Make your
BEST IDEAS
count
*
RULE
7
NEVER STOP
THE MOST IMPORTANT
LEARNING
RULE
?
LEARN
LEARN
AND THEN KEEP
,
,
LEARNING
THE
7
GOLDEN RULES
OF INVESTING
- Warren Buffet
We try to avoid buying a little of this or that when we are only lukewarm about the business or its price. When we are convinced as to attractiveness, we believe in buying worthwhile amounts
- Charlie Munger
The game of life is the game of everlasting learning. At least it is if you want to win.
BUY,
BUY
Buying a stock because CNBC recommended it, or because your uncle recommended it is a sure way to loose money
Can you remember all of the
Seven Golden Rules
?
1
2
3
4
5
6
7
NEVER STOP LEARNING
DON'T PUT ALL YOUR EGGS IN ONE BASKET, BUT DON'T HAVE TOO MANY BASKETS, EITHER
DON'T FOLLOW THE HERD, STAY CALM AND RATIONAL
DO YOU OWN HOMEWORK AND OWN WHAT YOU KNOW
BUY WITH A MARGIN OF SAFETY
GOOD COMPANIES MAKE GOOD INVESTMENTS (DITTO FOR BAD COMPANIES)
THINK LONG-TERM
The Seven Golden Rules
THE
8
Once you are successful
FIND WAYS TO GIVE BACK TO
THE WORLD
RULE
8
8
ONCE YOU ARE SUCCESSFUL FIND WAYS TO GIVE BACK TO THE WORLD
Bonus
HANDOUT
1.4
The
Seven Golden Rules
of Investing
LEARNING
ACTIVITY
Bonus rule
LET'S

PLAY
https://play.kahoot.it/#/?quizId=b4618500-4882-4c5e-b2dd-7e79ea87e599
LET'S
BEGIN
Full transcript