Mira que casualidad, justo cuando hace nada escribí en mi hilo acerca de algo similar…
“A word to you young folks about research.
Most of you are only investing $1,000 at a time in a company, some folks even less than that. I recall Eric setting up his portfolio initially at only $500 per company. How much research do you think is necessary for a $1,000 investment? A $500 Investment? A $200 investment?
There are some people here who use Robinhood as a brokerage firm where you may only be investing $200 per month and it’s spread between 4 companies. Do I really care what a company is selling at times earnings on such a small investment? Do I really care what the PEG ratio is, the PE ratio, or the valuation itself? … It’s all unnecessary in my opinion. You are going to be adding to these positions many times over the decades to come so today’s decision to buy, even if the company is overvalued, is irrelevant.
When I started out with dividend growth investing, the only research I did was to look at Value Line. I wanted to see where the company was rated 1 or 2 for safety, paid a dividend, had a financial strength rating of B+ or better, and was a company that I liked what they did for a living. … That was it!
Everything else is noise because all the financial criteria that the geniuses look to is constantly changing from month to month, year to year. It don’t mean nuthin”.
The most simplest and efficient way to manage a portfolio that you are going to build for the next 2 or 3 decades is to simply buy small and then only add to companies in the green as you go forward. If you have a $1,000 or $500 investment that is showing red, don’t add to it until it turns green. This way if the company shows it can’t move forward, you minimize losses. Don’t average down on companies in the red when most of your other companies are showing green. Build on strength.
Stop trying to be too smart. Be like me! Be dumb enough, to be smart enough, to simply continue building share count on companies in the green. Your portfolio will thank you for it years from now."