Investing for Survival
Focus on the 5 Things That Really Matter
by
1. Valuation:
How are stocks valued? Are they cheap or are they expensive? (Keeping in mind
that cheap stocks can get MUCH cheaper, and expensive stocks can get MUCH
dearer).
2. Trend:
What is the economy doing in sum? Is it expanding or contracting? What is the
market doing — rising, falling or range-bound?
3. Inflation:
What is the overall trend in inflation? Are prices rising or falling or stable
— and how rapidly?
4. Earnings:
Are companies able to grow their top and bottom lines?
5. Credit:
What is the cost and availability of credit?
There are lots of other elements we
can talk about — but if you understand these five things and get them more
or less correct, you are ahead of 90% of your fellow investors.
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