Thread by @stockifi_Invest

17 Most important Lessons from the first book I ever read on Value Investing:

1) Learn to Stand against the Crowd:
Being a value investor usually means standing apart from the crowd, challenging conventional wisdom, and opposing the prevailing ideas. It can get very lonely.

2) Forecasting is a bad strategy:
Those who think who can predict the future should participate fully, using borrowed money, when the market is about to rise and get out of the market before it falls.

3) Simple but NOT easy:
Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon.

4) Learn to be a Contrarian thinker:
Since they are acting against the crowd, contrarians are almost always initially wrong and likely for a time to suffer paper losses. By contrast, members of the herd are nearly always right for a period.

5) Stop Analysis Paralysis:
information generally follows the well-known 80/20 rule: the first 80 percent of the available information is gathered in the first 20 percent of the time spent.

6) Learn to be conservative in assumptions:
How do value investors deal with the analytical necessity to predict the unpredictable?
The only answer is conservatism

7) Focus on the margin of safety:
How can investors be certain of achieving a margin of safety?
By always buying at a significant discount to underlying business value and giving preference to tangible assets over intangibles.

8) Focus on the Process vs the Outcome:
All an investor can do is follow a consistently disciplined and rigorous approach; over time the returns will come. Rather than targeting a desired rate of return, even an eminently reasonable one, investors should target risk.

9) Business Valuations can be complex:
Investing would be much simpler if business values did remain constant while stock prices revolved predictably around them like the planets around the sun.

10) Focus on reasonable returns and expectations:
An investor who earns 16 percent annual returns over a decade, for example, will, perhaps surprisingly, end up with more money than an investor who earns 20 percent a year for nine years and then loses 15 percent the 10th year.

11) Never Forget Rule No.1:
Warren Buffett likes to say that the first rule of investing is "Don't lose money," and the second rule is, "Never forget the first rule."

12) Why Institutional Investors Underperform? :
The prevalent mentality is consensus, groupthink. Acting with the crowd ensures an acceptable mediocrity; acting independently runs the risk of unacceptable underperformance.

13) Stock market is not about making quick money:
Anyone would enjoy a quick and easy profit, and the prospect of an effortless gain incites greed in investors. Greed leads many investors to seek shortcuts to investment success.

14) Learn the difference between Value & Price:
Value in relation to price, not price alone, must determine your investment decisions.

15) Focus on Improving your Mindset:
Investing is serious business, not entertainment. If you participate in the financial markets at all, it is crucial to do so as an investor, not as a speculator, and to be certain that you understand the difference.

16) All market fads come to an end:
Security prices eventually become too high, supply catches up with and then exceeds demand, the top is reached, and the downward slide ensues.

17) Most investors are dominated by emotions:
Rather than responding rationally to market fluctuations, they respond emotionally with greed & fear.
We all know people who act responsibly most of the time but go berserk when investing money.
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