Reduce Your Risk and Increase Gains with This Strategy

“Take a simple idea and take it seriously.”

I wish I had said that but, it was Charlie Munger of Berkshire Hathaway Inc. (NYSE:BRK-A).

Charlie is the Oscar Wilde of Finance in that there seems to be a Mungerism for every occasion, but this is my favorite and probably the most important of them all, “Sometimes we overcomplicate the investment process, and it hurts our long-term returns.”

Applying the concept of taking simple things seriously works very well when it comes to bank stocks. It doesn’t need to be rocket science by any stretch of the imagination.

It occurred to me some years ago that a portfolio of bank stocks that traded at low Price-to-Earnings ratios, and paid a reasonably high dividend, would be a pretty profitable endeavor. As it turns out, I was almost right.

Applying these simple factors to bank stock is not just pretty profitable; it is wildly profitable.

Applying these simple factors to bank stock is not just pretty profitable; it is wildly profitable.


The Three Keys to Successful Investing in Any Business

A fascinating topic of discussion sprang up the other day that I think is worth discussing.

The question was simple. What business do you want to be in ten years from now?

If you can identify that simple premise, then you can begin to look for companies that will be a big part of that business, and you have a decade long runway of growth ahead of you.

The answer should be easy, shouldn’t it? After all the next big thing is right in front of our noses.

We want to be in virtual reality, driverless cars, robotics, artificial intelligence, cannabis, or maybe medical devices and biotechnology.

This is where all the excitement will happen, and huge profits will be made by investors who venture into the space today.

There is only one problem with that idea.