Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
OTHER THINGS TO IGNORE
By the way, it’s not just the market that you should forget about.
“I spend virtually no time trying to predict the economy, interest
rates, or inflation either,” Don Yacktman adds. “I feel it is a far more
valuable use of my time to look for large disparities between the value
of a business’s property and its current price in the marketplace. My
objective is to buy high return businesses at favorable prices and wait
patiently for the market to upwardly revalue them, instead of focusing
on whether the economy, interest rates, or the market are forecast to
go up or down. By reducing the number of variables in my analyses
and avoiding economic guesstimates, I believe I am effectively reducing
risk.”
The rationale behind Yacktman’s blasé attitude is straightforward.
“In investing, as in coaching a basketball team, certain events can be
controlled and others cannot,” he offers. “I believe good coaches (and
investors) focus on the controllable and lose little sleep worrying
about factors outside their control. If I do my homework and buy
high-return businesses at big discounts, these outside influences
should be relatively insignificant in my decision process.”
Roy Papp couldn’t agree more. “When investing, you should take
a long-term point of view and ignore the weekly expert opinions,
forecasts, one-month figures, and views of very experienced analysts
who have been in the industry for as many as two years,” he maintains.
THE BOTTOM LINE
Take a long-term view of investing and ignore the day-to-day
fluctuations of the economy, interest rates, and overall stock market.
These constantly changing variables have little or no impact on the
companies in your portfolio.
If you can’t help but pay attention to how your stocks and the
market averages are doing, at least resist the temptation to panic in
or out based on the events of the moment. Instead, use this information
to your advantage. For instance, if you see the price of a company
you own or have been eyeing get slammed by the market for an irrational
reason, this may be an opportune time to buy. What’s more, it
is generally best to avoid purchasing stocks on days when the market
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