Investing 102

[toy71camaro]

hmm... Personally, I think your spending too much time simply crunching numbers rather than learning their business.

What's been preached here over the hundreds of pages is to
1. Buy "Best of breeds"
2. Buy "what you understand"

To me, just looking from the outside here, you're buying strictly on last years performance.

Now... you could do just fine with that theory. However, the first time Stock "X" is taken to the ringer, You'll be scrambling to figure out if you picked the bad one, if you should sell, or what. You don't understand the fundamentals of the company. What makes them profitable, and what can bring them down.

Personally, I would find 10 sectors of the market. Find the top 3 "best of breeds" in those sectors, then compare them against each other. Both looking back and forward as well as understanding their business model.

I'm no expert by any means. That just what I feel I've learned here. Not to simply look at the last year worth of numbers, but a bigger broader picture.