Other strategies that seem to be working for me:
* To buy companies that have made a profit for 20 straight years (especially when one buys the cheaper ones &/ the ones with high ROC)
* Buying the "Dogs of the S&P/Nasdaq Comp" (e.g., the 10 co.'s in the S&P500 with the lowest P/E).
* Buying and holding great companies forever, or for a very long time.
* Buying shares in companies whose products or services one uses and loves oneself, and whose growth prospects seem compelling (the Lynch approach).
* Special situations – e.g., a SPAC is liquidating itself and the cash trades at a discount, but the terms of the liquidation are too complex for most people to bother (but not really that complex, just a bit messy); or a company will redeem its shares at book value, but its shares trades still at a discount to book (these things actually happen (ir)regularly!).
* Turnarounds where the turnaround already show signs of happening: as Peter Lynch explained, one shouldn't be in a hurry to buy a turnaround, and one shouldn't be in a hurry to sell it – it usually takes longer (and lasts longer) than one would expect.
* Taking a "venture capital" approach, buying companies for the long run, largely disregarding current valuation in the hope of achieving large capital gains (the Phil Fisher approach &/ the Motley Fool approach; growth investing).
The two last ones are the most difficult ones to systematize – but also probably the most profitable ones, if done right. |
