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TIP651: Value Investing in a Growth-Obsessed Market w/ Scott Barbee
We Study Billionaires - The Investor’s Podcast Network
Unconventional Principles for Assessing Investment Risk
Do not rely on historical price volatility as a measure of investment risk. Instead, consider permanent capital loss as the true indicator of risk, focusing on the long-term sustainability of a company's value over stock price fluctuations. Concentrate capital on a select number of holdings and sectors, recognizing that high stock price multiples can significantly amplify risk, as even slight adjustments in these multiples can lead to substantial losses. Acknowledge the dangers of leverage, which can exacerbate cash flow issues during market downturns. Further, critically assess business fundamentals, as misjudging key aspects of a company's performance can lead to misguided investments. Emphasize a long-term perspective, understanding that short-term volatility or tracking errors should not dictate investment strategy; instead, prioritize thorough fundamental analysis to identify strong investment opportunities despite potential short-term challenges.
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