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Anonymous
PROPER INVESTMENT ADVICE, NO TROLLING
2016-01-20 14:31:20 Post No. 1050733
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PROPER INVESTMENT ADVICE, NO TROLLING
Anonymous
2016-01-20 14:31:20
Post No. 1050733
[Report]
– Don't look for yield;
– Don't look for rock-bottom prices.
Find companies that a) operate in a sector with a future, and b) have positive OPERATING and FREE cash flows.
If you don't know what these terms refer to, look them up. Public companies disclose their cash flow data in their annual reports. I trust that you actually read annual reports of those companies you're invested in, biz?
The purpose of this advice is not to help you find great trading opportunities, or find high growth companies. In fact some shockingly unprofitable enterprises can be great for speculation, and many high growth companies aren't cash flow positive at all (consider a certain media streaming company beginning with N).
It's purpose is to de-risk your investment portfolio. Strong cash flow is the best and most sustainable way that a business has to ensure it can pay its liabilities when they fall due. In a serious downtown such companies have the most room to move, fiscally speaking, and the best prospects for trading through depressed markets.
Remember Buffet's maxim: a great business at a fair price is better than a fair company at a great price.
