For years we’ve cautioned against paying to much attention to the financial media machine, especially when it comes to buy recommendations from the pundits and talking heads that operate it.
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-David discusses the importance of the price/earnings ratio in evaluating equities and the effects of today’s market valuations on inflation-adjusted returns. He also reveals the four most dangerous words in investing.
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David discusses the P/E ratio (and your value judgment) and its role in evaluating whether or not you should buy a stock.
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David explains why today’s market valuations leave little margin of safety when it comes to inflation-adjusted returns.
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-David makes the case for maintaining a margin of safety (low P/E) in your investment strategy to maximize returns.
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David takes a look at investing principles you ignore at your own peril. He also looks at the “ones that got away” during the Tech Bubble and why you should be glad they did.
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David explains the price to earnings ratio and how it relates to investing “with a margin of safety.” He also talks about a margin of safety in the bond market.
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The appearance that some stocks in these sectors with low P/E ratios or book value are “cheap” is what is known as the “Value Trap.”
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