Sunday, 9th April 2017

What is your advantage?

Written by George Traganidas Topics: Habits, Stock Investing, Wealth Building

Advantage

Investing is a zero sum game. For each investor that is buying a security because he thinks that it is undervalued, another investor is selling the same security because she thinks that it is overvalued. This difference in opinion is what makes the market. If everyone wants to buy or sell the same security at the same time, there would be no one to take the other side of the trade and there would be no market.

Therefore, the most important concern for an investor is to consider who is at the other side of the trade.[…]

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Thursday, 5th May 2016

2016 Annual Berkshire Hathaway Shareholder’s Meeting

Written by George Traganidas Topics: Presentations, Stock Investing, Wealth Building

Berkshire Hathaway meeting

Berkshire Hathaway held its 51st shareholder’s meeting in Omaha on Saturday 30th of April. This was the first year that the meeting was also broadcast live through Live Feed Video and it will be available for 30 days after the meeting. This caused a drop in the number of people who attended the meeting this year in Omaha, because they could watch the event from home.

Here follow my notes from the meeting. The notes will not cover all the topics and they are my attempt to summarise their most important points.[…]

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Tuesday, 12th April 2016

Value investor’s guide to company valuation

Written by George Traganidas Topics: Books, Stock Investing

Company Valuation

The job of an investor in the stock of a company is to estimate a fair value for the company and then determine if the stock is trading for more or less than that price in the market. Buying companies for less than they are worth in the market is the basis of value investing. This style of investing became popular with Benjamin Graham and many people continue to practice it with success.

This post is based on the teachings of Bruce Greenwald. Bruce Greenwald is a professor at Columbia University’s Graduate School of Business and he holds the post that Benjamin Graham did. Bruce continues to teach company valuation based on the principles that Ben pioneered. The information in this post is drawn from Bruce’s lectures in Columbia, his book “Value Investing: From Graham to Buffett and Beyond” and from various presentations and talk he gave.[…]

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Wednesday, 27th January 2016

Security Analysis by Ben Graham

Written by George Traganidas Topics: Books, Stock Investing, Wealth Building

Security Analysis by Ben Graham

Ben Graham published the second edition of Security Analysis in 1940 and many investors still consider it one of the best investment books ever written. The book is about 800 pages long and by no means is an easy read. This has discouraged a lot of people from reading the book and learning from the “father of security analysis”. The book does a great job of laying out the investment philosophy of Ben Graham and how to think about investments and businesses. He outlines principles about investing in bonds, preferred shares, warrant and common stocks and uses a lot of examples from companies in that era to demonstrate his thinking.[…]

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Monday, 14th December 2015

Quotes Various People

Written by George Traganidas Topics: Quotes

When facts change, I change my mind. What do you do sir?
– John Maynard Keynes

There is a huge difference between knowing the name of something and knowing something
– Richard Feynman

No matter how beautiful your theory, no matter how clever you are or what your name is, if it disagrees with experiment, it’s wrong. In this statement is the key to science.
– Richard Feynman

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Friday, 16th October 2015

Business Moats

Written by George Traganidas Topics: Stock Investing, Wealth Building

Moat

One of the tasks of an analyst who is evaluating a business is to think about the moat of the business. But what is a moat? A simple way to think about moats is to imagine that the business is a castle and the moat it what surrounds the business and keeps other businesses at bay. Every business has a moat, but the difference is the size and the durability. Some businesses have narrow moats and other have wide ones. Some business moats are shrinking as time goes by, whereas others are widening. Ideally an analyst wants to find a business with a wide moat that keeps widening. One of the characteristics of the capitalist system is that a profitable business will attract more and more competitors and these competitors will test your moat repeatedly. Thus, the more successful a business is the harder it is to keep being successful and widen its moat. […]

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Friday, 29th May 2015

What makes Berkshire Hathaway special?

Written by George Traganidas Topics: Stock Investing

Charlie Munger

This years shareholder’s letter included for the first time a piece that was written by Berkshire Hathaway’s vice-chairman Charlie Munger. In his letter Charlie, reversed engineered the culture of Berkshire; how it operates and how it is run. He explains that all this was not based on any grand design or blueprint that Warren devised 50 years ago, but something that grew organically. Here is what Charlie has to say:

The management system and policies of Berkshire under Buffett (herein together called “the Berkshire system”) were fixed early and are described below:

(1) Berkshire would be a diffuse conglomerate, averse only to activities about which it could not make useful predictions.[…]

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Tuesday, 26th May 2015

Investment advice from Warren Buffett

Written by George Traganidas Topics: Personal Finance, Stock Investing, Wealth Building

Warren Buffett

A lot of people are still wondering where they should invest their money. Should they buy some stocks or are they too risky and they should invest in bonds instead. In his speeches and writings Warren Buffett has always said that a diversified portfolio of American businesses will provide the best long term results as long as the investor buys and holds wonderful businesses for the long term. His approach is simple so anyone can follow it and it delivers results with minimum supervision over the investments and minimum loss of sleep. He has followed his own advice and over 50 years it has helped him to build Berkshire Hathaway into a successful holding company. He is a man who follows his own advice. […]

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Tuesday, 5th May 2015

2015 Annual Berkshire Hathaway Shareholder’s Meeting

Written by George Traganidas Topics: Presentations, Stock Investing, Wealth Building

Berkshire Hathaway meeting

This time every year thousands of people from all over the world are gathering in Omaha to hear the words of Warren Buffett and his partner Charlie Munger. This year the crowd was about 44,000 people and they were not disappointed. The meeting started at 8:30 with the annual movie and at about 9:00, Warren and Charlie started the Q&A session. They answered question for about six hours on every topics. As always no questions were off limit.

Here follow my notes from the meeting. The notes will not cover all the topics and they are my attempt to summarise their most important points. […]

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Sunday, 3rd May 2015

Who will succeed Warren Buffett?

Written by George Traganidas Topics: Stock Investing

Warren Buffett

This is the question that many shareholders are asking every year. Berkshire Hathaway has grown from a small textile company to the 4th largest US company under the leadership of Warren Buffett and his partner Charlie Munger. Now, a lot of people fear that when the two great leaders are not running the company any more, this great story will come to end, because in many people’s eyes Berkshire Hathaway is Warren Buffett. This is a valid concern. Or is it not?

As Charlie once said, when asked about the future of Berkshire, “If your main concern in life is who will succeed Warren then you have any easy life”. […]

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Sunday, 18th May 2014

2014 Berkshire Hathaway Annual Shareholder meeting notes and more

Written by George Traganidas Topics: Presentations, Stock Investing, Wealth Building

Berkshire Hathaway meeting

On Saturday 3rd of May I joined almost 38,000 other “students” to attend the master class for investors that is the Berkshire Hathaway annual meeting. People started queuing at 2:30 am on Saturday in order to get a front seat to listen to Warren Buffett and his partner Charlie Munger. A student was paid $100 to start queuing at 3:00 am for a shareholder who arrived at 7:00 am to take his place in the line. As per usual, Warren Buffett and his long time business partner Charlie Munger sat on stage in Omaha, Nebraska, for over five hours answering questions from reporters, financial analysts, and Berkshire shareholders. Many shareholders had travelled great distances to be part of the weekend.[…]

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Wednesday, 12th March 2014

Lessons from Warren Buffet’s 2014 letter to shareholders

Written by George Traganidas Topics: Property Investing, Stock Investing, Wealth Building

Warren Buffett

On Saturday 1st of March, Warren Buffet released his 2013 annual letter to shareholders of Berkshire Hathaway. As always his letter is a great read, because it does not only tell you about his company but also gives general advice on investments and finance. He has been helping people for years to better understand the investment process and what they should look for and what to avoid. His insights on how to value companies are priceless. In addition, he sometimes gives general finance advice to help people who are not investment professionals themselves and they just want to look after their wealth and grow it.[…]

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Saturday, 23rd March 2013

How to value a business

Written by George Traganidas Topics: Stock Investing, Wealth Building

There seems to be a lot of confusion and discussion on how to value a business and determine what is a fair price to pay. If you are wondering whether to buy a share or the whole business you must be able to answer a simple question. How much is the value of the business and is the current price fair? After all a stock is part ownership of a business.

So let’s start from the beginning. Valuing a business is an eight step process and it takes time and effort.[…]

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Monday, 31st December 2012

Benjamin Franklin’s “The Way to Wealth”

Written by George Traganidas Topics: Articles, Habits, Personal Finance, Wealth Building

Courteous Reader,

I have heard that nothing gives an author so great pleasure, as to find his works respectfully quoted by other learned authors. This pleasure I have seldom enjoyed; for tho’ I have been, if I may say it without vanity, an eminent author of almanacs annually now a full quarter of a century, my brother authors in the same way, for what reason I know not, have ever been very sparing in their applauses; and no other author has taken the least notice of me, so that did not my writings produce me some solid pudding, the great deficiency of praise would have quite discouraged me.[…]

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Saturday, 15th September 2012

Virtues by Benjamin Franklin

Written by George Traganidas Topics: Habits

Benjamin Franklin was a man of many roles – printer, author, philosopher, scientist, inventor, diplomat and politician to name a few. One of the most bold and arduous projects he undertook was to arrive at moral perfection. He wanted to live without committing any fault at any time and to conquer all that either natural inclination, custom or company might lead him into. As he knew, or thought he knew, what was right and wrong, he did not see why he might not always do the one and avoid the other.[…]

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Saturday, 12th May 2012

Berkshire Hathaway shareholders meeting 2012

Written by George Traganidas Topics: Seminars, Stock Investing, Wealth Building

Warren Buffet

Last weekend I went to Omaha for the annual Shareholders meeting of Berkshire Hathaway. It was an opportunity to see and hear Warren Buffet and Charlie Munger speak live and answer questions for more than 5 hours. It is a great experience and really well worth it.

On Friday evening, there were welcome drinks with food and a live band at Borsheims. It attracted a big crowd and it was a great place to socialise and meet fellow shareholders. Some of them have been going to the annual meeting for 30 years, but there were also a few that this was the first meeting that they attended.[…]

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Friday, 10th February 2012

Why stocks beat gold and bonds

Written by George Traganidas Topics: Articles, Stock Investing, Wealth Building

Fortune
By WARREN E. BUFFETT
Published: February 9, 2012

Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. At Berkshire Hathaway (BRKA) we take a more demanding approach, defining investing as the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power — after taxes have been paid on nominal gains — in the future. More succinctly, investing is forgoing consumption now in order to have the ability to consume more at a later date.

From our definition there flows an important corollary: The riskiness of an investment is not measured by beta (a Wall Street term encompassing volatility and often used in measuring risk) but rather by the probability — the reasoned probability — of that investment causing its owner a loss of purchasing power over his contemplated holding period. Assets can fluctuate greatly in price and not be risky as long as they are reasonably certain to deliver increased purchasing power over their holding period. And as we will see, a nonfluctuating asset can be laden with risk.[…]

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Sunday, 16th October 2011

Howard Marks Investing Ideas, part 4

Written by George Traganidas Topics: Stock Investing, Wealth Building

The “know” and “don’t know” schools

The “I know” school people believe they can discern what the future holds, and in their world investing is a simple matter:

  • First you decide what the economy is going to do in the period under consideration.
  • Then you figure out what the impact will be on interest rates.
  • From this you infer how the securities markets will perform.
  • You choose the industries that will do best in that environment.
  • You make judgments about how the industries’ companies will fare in terms of profits.
  • Based on all of this information, you pick stocks that are bound to appreciate.[…]

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Sunday, 16th October 2011

Howard Marks Investing Ideas, part 3

Written by George Traganidas Topics: Stock Investing, Wealth Building

Performance

A bit above average performance is not that bad if you can consistently do it for many years. You do not need to swing for the fences in order to achieve long term gain. If you are willing to take huge bets on assets to gain the spectacular results you should be ready to fail some times and then have huge losses. That will give you an average return over the years, unless of course you can be right about the future most of the times. Not an easy task to accomplish.[…]

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Sunday, 16th October 2011

Howard Marks Investing Ideas, part 2

Written by George Traganidas Topics: Stock Investing, Wealth Building

Telling the future

Making market forecasts on a consistent basis is not an easy thing. Many people try and none succeed on it. If you are always crying ‘wolf’ then at some point you will be right, but that does not tell us about your ability to forecast market movements. A useful market forecast is only useful if it is in contrary to popular belief. If everyone predicts it then this is already reflected in the price of assets. […]

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Sunday, 16th October 2011

Howard Marks Investing Ideas, part 1

Written by George Traganidas Topics: Stock Investing, Wealth Building

When the world’s self-made billionaires speak it is good to listen. Then when you find out who they follow on a regular basis, maybe you should look at them too. This is how I learned about Howard Marks. Howard is the chairman of Oaktree since 1995. His approach to money management is based on a simple motto: “if we avoid the losers, the winners will take care of themselves”. His memos to clients are a must read for investors. Here are some pieces of advice taken directly from his memos.[…]

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Thursday, 15th September 2011

“Common Stocks and Uncommon Profits” by Philip A. Fisher

Written by George Traganidas Topics: Books, Stock Investing, Wealth Building

Common Stocks and Uncommon Profits

Philip Fisher was in investor for many years and he was a very successful one. In his book “Common Stocks and Uncommon Profits” he outlines some of his ideas that have helped him to be a successful investor.

He regularly used to go out on the field and speak with employees of the companies, with suppliers, competitors and the management and was able to gather valuable information from them. Of course, he did a lot of preparation work before he went to the meetings to show to people that he was a serious investor.

Here are 15 points that he was looking for in companies that he wanted to invest in. Many of them are more difficult to quantify than a simple P/E ratio, but none the less very important.[…]

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Thursday, 15th September 2011

The lessons of the 2007 crash

Written by George Traganidas Topics: Wealth Building

Howard Marks from Oaktree capital wrote in a memo the lessons that the market crash of 2007 should have thought us. A lot of these lessons are not new ones, but a repetition of old lessons that investors did not learn last time. Or maybe their memory is short term. Maybe more attention should be paid this time and learn these lessons to avoid repeating them next time. Because there will surely be a next time. Here are the lessons:[…]

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Monday, 8th August 2011

This time it is not different

Written by George Traganidas Topics: Wealth Building

Mark Howard of Oaktree Capital Management wrote in one of his memos about the times that are unchanged. Here is his notes:


Why do the mistakes repeat? That’s a good question, but not much of a mystery. First, few investors have been around long enough to recognize reoccurrence of the errors of twenty or forty years ago. And second, the greed that argues for ignoring “the old rules” easily trumps caution; hope truly does spring eternal. That’s especially true when the good times are rolling. The tendency to ignore the rules invariably reaches its apex in periods when following them has cost people money. It is thus, as Galbraith points out, that those who harp on the lessons of the past are dismissed as old fogies. What are some of the recurring mistakes investors make?[…]

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Monday, 8th August 2011

Standing on the shoulders of giants

Written by George Traganidas Topics: General

Standing on the shoulders of giants

In my pursuit for knowledge I read many internet articles and books. Sometimes I come across ideas that I find extremely interesting and I want to put them in my blog for more people to read and learn from them. Many of the original authors have expressed these ideas in such an easy to understand manner that any attempt of my part to re-write them or summarise them will result in loss of clarity or content. The original authors did such a great job that I just re-post them. Then I use these ideas in later posts to build on and create new practical ones.

I am not seeking to gain credit from their work[…]

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Monday, 8th August 2011

The most important thing

Written by George Traganidas Topics: Wealth Building

The most important thing

Mark Howard of Oaktree Capital Management wrote in one of his memos that a lot of people ask him what is the most important thing he has learned throughout his years of investing. After been asked this question a lot, he decided to compile a list of the answers he has given to various people, because he has given various answers. Here is the list:

  • The most important thing – above all – is the relationship between price and value.
  • The most important thing is a solidly based, strongly held estimate of intrinsic value.

[…]

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Monday, 8th August 2011

How to build a successful partnership

Written by George Traganidas Topics: Wealth Building

Successful Partnership

Mark Howard of Oaktree Capital Management wrote in one of his memos some very good ideas about building a successful partnership:


If an organization is to be the best, it must find, train and retain the best. Not only does turnover drain off your best people, but it also takes their institutional memory and leaves you bogged down in hiring and training their replacements.

We always have placed great emphasis on preventing turnover, and the results are visible – in the very small number of senior professionals who have moved on to other employment in my 25 years in portfolio management, and in the investment performance that my long-term colleagues have produced.[…]

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Tuesday, 21st June 2011

Compound interest

Written by George Traganidas Topics: Personal Finance, Wealth Building

Compound interest is when the interest you have earned gains interest itself. For example, if you deposit £1000 in the bank and you get 10% interest per year, at the end of year 1 you will have £1100. Then at the end of year 2, you will have £1210. During the second year the interest is applied to your original amount (£1000) and to the interest that you gained at the 1st year (£10). This is how money multiplies over the years and it works for you. Notice that you have only deposited £1000, but then the money that you gain from interest multiplies by itself (together with your original amount) and works for you. This is the secret of how to become rich. Many of the richest people in the world have used this simple idea to create their fortunes, e.g. Warren Buffet, John D. Rockefeller.[…]

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Thursday, 23rd December 2010

A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business

Written by George Traganidas Topics: Presentations, Stock Investing, Wealth Building

Charles Munger
USC Business School
1994

I’m going to play a minor trick on you today – because the subject of my talk is the art of stock picking as a subdivision of the art of worldly wisdom. That enables me to start talking about worldly wisdom – a much broader topic that interests me because I think all too little of it is delivered by modern educational systems, at least in an effective way.

And therefore, the talk is sort of along the lines that some behaviorist psychologists call Grandma’s rule after the wisdom of Grandma when she said that you have to eat the carrots before you get the dessert.[…]

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Monday, 20th December 2010

Quotes Charlie Munger

Written by George Traganidas Topics: Quotes

Charlie Munger

All intelligent investing is value investing – acquiring more than you are paying for. You must value the business in order to value the stock.
— Charlie Munger

The best thing a human being can do is to help another human being know more.
— Charlie Munger

Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group then to hell with them.
— Charlie Munger

In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.
— Charlie Munger

Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.
— Charlie Munger

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Monday, 20th December 2010

How to combat a financial crisis

Written by George Traganidas Topics: Personal Finance, Wealth Building

A lot of people are confused on what to do in this difficult economic climate. People are losing their jobs, governments are raising taxes, goods are becoming more expensive, currencies are devalued, etc. This is not a nice picture and many people are feeling helpless in this doom and gloom.

Maybe this is not the best way to think, but you have to consider how all this affects you. Maybe the general economy is bad, maybe companies are not doing so well, but the real question is how are you doing? What does all this mean for you? What can you do to avoid the chaos and (to take it a step further) profit from all this? Do not think that this is totally selfish, it partially is. But looking after yourself, you can survive and then you can provide for the people that matter to you. You can provide to them in the form of money, but even better you can provide to them in the form of knowledge.[…]

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Tuesday, 9th November 2010

Warren Buffett’s Business Evaluation Filters

Written by George Traganidas Topics: Stock Investing, Wealth Building

At a press conference in 2001, when Warren Buffett was asked how he evaluated new business ideas, he said he used 4 criteria as filters.

  • Can I understand it (Is it predictable. Do I have a reasonable probability of being able to assess where the business will be in 10 years)?[…]

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Monday, 1st November 2010

Charlie Munger Investment Principles Checklist

Written by George Traganidas Topics: Stock Investing, Wealth Building

Poor Charlie's Almanack

I finished reading “Poor Charlie’s Almanack” that details the thinking principles of Charlie Munger about investments and life in general. The book is an amazing read, because it shows how Charlie thinks about problems using many different ways. This helps him to avoid the “Man with a hammer” syndrome and allows him to see other aspects of problems and try many different ways to solve them.

The book contains all his talks, lectures and public commentary.[…]

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Thursday, 21st October 2010

Dollar Cost Averaging

Written by George Traganidas Topics: Stock Investing, Wealth Building

A lot of people are trying to time the market, but very few are able to do it consistently. The old advice of buy low and sell high is not that easy to implement and many people end up doing the exact opposite. An easy way to invest in the stock market is dollar-cost averaging. Here is a helpful post from fool.com that explain how it works:

Let’s begin with a definition. Dollar-cost averaging is a fancy term for periodic investments of fixed sums of money. Simply put, dollar-cost averaging involves investing a set amount of cash ($100, $500, $1,000) at regular intervals (monthly, quarterly, yearly) into a stock, a group of stocks or a fund. The key to its success is consistency. Investing the same amount each time on a set schedule can really help grow your portfolio over time.[…]

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Thursday, 21st October 2010

Enterprise Value

Written by George Traganidas Topics: Stock Investing, Wealth Building

When you are evaluating a company you need many tools that will help you to look at the company in different ways. One such tool is enterprise value. Here is a very good article from fool.com that explains what it is:

When trying to determine the value for a given company, a metric that many investors use religiously is market capitalization, better known by the shortened, slightly sassier term “market cap.” It’s simple enough to figure out — all you do is multiply the company’s shares outstanding by its current share price.[…]

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Monday, 4th October 2010

The Art of Stock Valuation, part 1

Written by George Traganidas Topics: Stock Investing, Wealth Building

When you are looking to invest your money in the stock market you need to go through thousands of companies and decide which ones will prosper in the future and which ones will not. The way to decide which ones will prosper is more of an art than it is science. Unfortunately, there is no secret formula for this although many people have tried unsuccessfully to create one that will work over the years. Many of these theories have been created based on mathematical models and all of them failed in due course.

This series of posts will look at people who have been successful at picking prosperous businesses over the years and will try to reverse engineer their successful approach. We will look at both quantitative and qualitative measures that can be used to evaluate companies. The data available for each of these companies is so vast that we need to sort through it, ignoring the noise and concentrate on the key metrics that really matter.[…]

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Wednesday, 8th September 2010

Option Strategies

Written by George Traganidas Topics: Options, Wealth Building

Option Strategies

There are a lot of option strategies and each one of them should be used in the appropriate situation. The guide below is a summary of a series of articles about the stock strategies. This summary will help you to identify which strategy to use in which situation so you can maximise your profits and reduce your loses. I will update the list below as a find new information about the strategies or as I learn new ones.[…]

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Wednesday, 8th September 2010

Bearish Spreads

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
February 11, 2010

Why use bearish spreads?

  • To profit on a falling stock or index while capping your risk.
  • To earn strong percentage returns on a moderate move in an underlying investment.
  • To lower the cost of bearish put option purchases.[…]

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Wednesday, 8th September 2010

Bull Call Spreads

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jim Gillies
August 25, 2009

Why use bull call spreads?

  • Capital gains: To profit on a stock you feel relatively bullish on.
  • Defense: To limit your capital at risk and lower your break-even point compared with just buying calls alone.
  • Leverage: To land an oversized potential return on your net cost, although you sacrifice additional upside.[…]

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Wednesday, 8th September 2010

An Introduction to Spreads

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
February 11, 2010

Why use spreads:

  • To profit on the movement in a stock while capping your potential loss at a pre-determined amount — though you cap your potential profit as well.
  • To purchase options with less cash up-front, which in turn helps leverage your potential returns.
  • To earn sizable percentage gains even on modest moves in the underlying stock.[…]

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Wednesday, 8th September 2010

Writing Straddles

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
November 18, 2009

Why write a straddle?

  • You believe a stock or index is going to hold steady or stay in a tight range.
  • You believe a stock that was recently volatile will settle down considerably.
  • You believe the market’s overall volatility is going to decrease.[…]

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Wednesday, 8th September 2010

Buying Straddles

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
October 7, 2009

Why buy a straddle?

  • You believe a stock or index will move dramatically, but you don’t know which way.
  • You believe volatility will increase in general, so the value of the options you’re buying will increase.
  • You want to leverage potential returns when the underlying investment moves meaningfully in either direction, but limit your risk.[…]

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Wednesday, 8th September 2010

Strangles

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
March 12, 2010

Why use strangles?

  • You buy (“buy to open”) a strangle to profit on a sharp move in a stock, whether up or down.
  • You write (“sell to open”) a covered strangle to profit when a stock stays within a wide range — or, if it doesn’t, to get a better buy price on new shares or a higher sell price on existing shares.[…]

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Wednesday, 8th September 2010

Diagonal Calls

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jim Gillies
September 28, 2009

Why use diagonal calls?

1. If you’re mildly bullish on a stock and want to generate income from a leveraged investment.
2. To profit from a range-bound stock.
3. If your underlying stock is chosen well, and you’re handed a little market luck, you can wake up a year or two hence with a significantly in-the-money call option that effectively costs you nothing.[…]

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Wednesday, 8th September 2010

Stock Repair

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
August 10, 2009

Who should use the stock repair strategy? Someone who is:

  • Down 15% to 25% on a stock and willing to forego profits to sell at breakeven.
  • Not interested in averaging down or holding for the long haul.
  • Using a margin-approved account and can write call options.[…]

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Wednesday, 8th September 2010

Synthetic Shorts

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com By Jeff Fischer August 10, 2009 Feeling bearish? If you’re looking to profit when stock prices slip, there’s a way to use options to mimic shorting a stock — but with distinct advantages. To set up this “synthetic short” position, you sell a call option and simultaneously buy a put option, using the same […]

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Wednesday, 8th September 2010

Synthetic Longs

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
August 10, 2009

Are you confident about a stock, but reluctant to pony up the cash to buy it today? A synthetic long may be just the ticket.

This option strategy works nearly the same as owning the underlying stock outright — except you don’t need to pay up front. Usually, you’ll set up a synthetic long on a stock if you foresee a strong catalyst for appreciation in the next 18 months or so. As the stock price goes up, your options gain value along with it, sometimes to a much greater degree.[…]

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Wednesday, 8th September 2010

Protective Collars

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
August 10, 2009

Protective collars are useful in bear markets or when you’re uncertain about a stock’s valuation risk. They can also be a prudent way to protect your gains on stocks that have recently leaped in price, nearing your estimate of fair value. Let’s explain how collars work, starting from the beginning.[…]

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Wednesday, 8th September 2010

Writing Covered Calls

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
August 10, 2009

Why use covered calls?

  • Income: To generate cash on a stable stock.
  • Defense: To profit if a stock you own slips in price.
  • A better sell price: To obtain a higher price when you’re ready to sell.[…]

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Wednesday, 8th September 2010

Writing Puts

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Jeff Fischer
August 10, 2009

Why write puts?

  • Income: To make money while waiting for your preferred buy price on a stock.
  • Advantage: To buy stocks at a lower net cost.
  • Profit: To earn income from stocks you believe will hold steady or increase modestly.[…]

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Friday, 23rd July 2010

Buying Puts

Written by George Traganidas Topics: Options, Wealth Building

Buying a put gives you the right to sell the underlying stock at a set price (the strike price) by a specified date (the expiration date). Your maximum loss with a put is limited to what you pay for the option up front (the premium).

Buying put options is a great way to profit from a stock’s fall while putting less of your cash at risk. In addition, you can buy puts to protect a stock – one that you’re bullish on for the longer term – from a near-term price drop. Buying protective puts can also help make your portfolio immune to a market crash.[…]

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Friday, 23rd July 2010

Buying Calls

Written by George Traganidas Topics: Articles, Options, Wealth Building

Fool.com
By Nick Crow
August 12, 2009

Why buy calls:

  • You believe a stock has a strong catalyst for appreciation over the coming months or few years.
  • You want to benefit from a stock’s upside, but put less capital at risk than buying the stock outright.
  • You want to leverage your bullish expectations on a stock you already own.[…]

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Wednesday, 9th June 2010

Options Glossary

Written by George Traganidas Topics: Options, Wealth Building

Options Glossary

American style: Options contracts that can be exercised at any time after purchase and before the expiration date.

Assignment: When the options writer (also called the seller) is forced to buy (for a put writer) or sell (for a call writer) the underlying stock. Essentially, your counterparty has exercised its option contract, which you wrote, to buy or sell the underlying stock.

At-the-money: An option whose underlying stock is trading at its strike price.

Bearish: An options strategy (and outlook) that achieves its maximum payoff when the underlying stock drops in price. For example, if you are bearish on a stock you know well, you could buy a put or a bear put spread.[…]

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Wednesday, 9th June 2010

Introduction to Options

Written by George Traganidas Topics: Options, Wealth Building

Introduction to Options

Why Options?

Options are excellent tools for generating income, protecting profits, hedging, and, ultimately, earning outsized gains. They can generate returns in flat markets, cushion the blow of down markets, and be outstanding performers in decent markets. Whatever your investment goals, options can be a powerful addition to your portfolio, used to hedge, to short, to produce income, and to obtain better buy and sell prices.

What Are Options?

Stock options formally debuted on the Chicago Board Options Exchange in 1973, although option contracts (the right to buy or sell something in the future) have been around for thousands of years. An option gives the holder the right, but not the obligation, to buy or sell an underlying stock at a set price (the strike price) by a set date (the expiration date). The option contract allows you to profit if a stock moves in your favor before the contract expires. Not all stocks have options, only those with enough interest and volume. There are only two types of options: calls and puts. A call appreciates when the underlying stock rises, so you buy a call if you are bullish on that company. A put appreciates when a stock declines. You buy a put if you believe a stock will fall or to hedge a stock that you already own.[…]

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Tuesday, 25th May 2010

Quotes Oscar Wilde

Written by George Traganidas Topics: Quotes

Oscar Wilde

A cynic is a man who knows the price of everything but the value of nothing.
— Oscar Wilde

A dreamer is one who can only find his way by moonlight, and his punishment is that he sees the dawn before the rest of the world.
— Oscar Wilde

A gentleman is one who never hurts anyone’s feelings unintentionally.
— Oscar Wilde

A little sincerity is a dangerous thing, and a great deal of it is absolutely fatal.
— Oscar Wilde

A man can be happy with any woman, as long as he does not love her.
— Oscar Wilde

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Tuesday, 25th May 2010

Quotes Paulo Coelho

Written by George Traganidas Topics: Quotes

Paulo Coelho

Be brave. Take risks. Nothing can substitute experience.
— Paulo Coelho

Beauty is the greatest seducer of man.
— Paulo Coelho

Every blessing ignored becomes a curse.
— Paulo Coelho

Everything that happens once can never happen again. But everything that happens twice will surely happen a third time.
— Paulo Coelho

If you start by promising what you don’t even have yet, you’ll lose your desire to work towards getting it.
— Paulo Coelho

Life was always a matter of waiting for the right moment to act.
— Paulo Coelho

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Tuesday, 25th May 2010

Quotes Thomas A. Edison

Written by George Traganidas Topics: Quotes

Thomas A. Edison

Anything that won’t sell, I don’t want to invent. Its sale is proof of utility, and utility is success.
— Thomas A. Edison

Be courageous. I have seen many depressions in business. Always America has emerged from these stronger and more prosperous. Be brave as your fathers before you. Have faith! Go forward!
— Thomas A. Edison

Being busy does not always mean real work. The object of all work is production or accomplishment and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing.
— Thomas A. Edison

Discontent is the first necessity of progress.
— Thomas A. Edison

Everything comes to him who hustles while he waits.
— Thomas A. Edison

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Tuesday, 25th May 2010

Quotes John D. Rockefeller

Written by George Traganidas Topics: Quotes

John D. Rockefeller

A friendship founded on business is better than a business founded on friendship.
— John D. Rockefeller

Charity is injurious unless it helps the recipient to become independent of it.
— John D. Rockefeller

Competition is a sin.
— John D. Rockefeller

Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.
— John D. Rockefeller

Don’t be afraid to give up the good to go for the great.
— John D. Rockefeller

Don’t blame the marketing department. The buck stops with the chief executive.
— John D. Rockefeller

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Tuesday, 25th May 2010

Quotes Bono

Written by George Traganidas Topics: Quotes

Bono

As a rock star, I have two instincts, I want to have fun, and I want to change the world. I have a chance to do both.
— Bono

Books! I dunno if I ever told you this, but books are the greatest gift one person can give another.
— Bono

Distance does not decide who is your brother and who is not. The church is going to have to become the conscience of the free market if it’s to have any meaning in this world – and stop being its apologist.
— Bono

It’s so sweet, I feel like my teeth are rotting when I listen to the radio.
— Bono

It’s stasis that kills you off in the end, not ambition.
— Bono

Music can change the world because it can change people.
— Bono

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Tuesday, 25th May 2010

Quotes Arnold Schwarzenegger

Written by George Traganidas Topics: Quotes

Arnold Schwarzenegger

Bodybuilding is much like any other sport. To be successful, you must dedicate yourself 100% to your training, diet and mental approach.
— Arnold Schwarzenegger

Failure is not an option. Everyone has to succeed.
— Arnold Schwarzenegger

For me life is continuously being hungry. The meaning of life is not simply to exist, to survive, but to move ahead, to go up, to achieve, to conquer.
— Arnold Schwarzenegger

Help others and give something back. I guarantee you will discover that while public service improves the lives and the world around you, its greatest reward is the enrichment and new meaning it will bring your own life.
— Arnold Schwarzenegger

I am a big believer in education, because when I grew up in Austria – when I grew up in Austria I had a great education. I had great teachers.
— Arnold Schwarzenegger

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Tuesday, 25th May 2010

Quotes Aristotle Onassis

Written by George Traganidas Topics: Quotes

Aristotle Onassis

After a certain point, money is meaningless. It ceases to be the goal. The game is what counts.
— Aristotle Onassis

I have no friends and no enemies – only competitors.
— Aristotle Onassis

If women didn’t exist, all the money in the world would have no meaning.
— Aristotle Onassis

It is during our darkest moments that we must focus to see the light.
— Aristotle Onassis

The more you own, the more you know you don’t own.
— Aristotle Onassis

The secret of business is to know something that nobody else knows.
— Aristotle Onassis

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Tuesday, 25th May 2010

Quotes Napoleon Hill

Written by George Traganidas Topics: Quotes

Napoleon Hill

A goal is a dream with a deadline.
— Napoleon Hill

Action is the real measure of intelligence.
— Napoleon Hill

All achievements, all earned riches, have their beginning in an idea.
— Napoleon Hill

All the breaks you need in life wait within your imagination, Imagination is the workshop of your mind, capable of turning mind energy into accomplishment and wealth.
— Napoleon Hill

Any idea, plan, or purpose may be placed in the mind through repetition of thought.
— Napoleon Hill

Before success comes in any man’s life, he’s sure to meet with much temporary defeat and, perhaps some failures. When defeat overtakes a man, the easiest and the most logical thing to do is to quit. That’s exactly what the majority of men do.
— Napoleon Hill

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Monday, 24th May 2010

Quotes Winston Churchill

Written by George Traganidas Topics: Quotes

Winston Churchill

A fanatic is one who can’t change his mind and won’t change the subject.
— Winston Churchill

A joke is a very serious thing.
— Winston Churchill

A lie gets halfway around the world before the truth has a chance to get its pants on.
— Winston Churchill

A man does what he must – in spite of personal consequences, in spite of obstacles and dangers and pressures – and that is the basis of all human morality.
— Winston Churchill

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
— Winston Churchill

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Monday, 24th May 2010

Quotes Isaac Disraeli

Written by George Traganidas Topics: Quotes

Isaac Disraeli

Every production of genius must be the production of enthusiasm.
— Isaac Disraeli

Mediocrity can talk, but it is for genius to observe.
— Isaac Disraeli

The wisdom of the wise, and the experience of ages, may be preserved by quotations.
— Isaac Disraeli

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Monday, 24th May 2010

Quotes Jack Welch

Written by George Traganidas Topics: Quotes

Jack Welch

An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.
— Jack Welch

Be candid with everyone.
— Jack Welch

Change before you have to.
— Jack Welch

Control your own destiny or someone else will.
— Jack Welch

Don’t manage – lead change before you have to.
— Jack Welch

Face reality as it is, not as it was or as you wish it to be.
— Jack Welch

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Monday, 24th May 2010

Quotes Andrew Carnegie

Written by George Traganidas Topics: Quotes

Andrew Carnegie

Aim for the highest.
— Andrew Carnegie

All honor’s wounds are self-inflicted.
— Andrew Carnegie

And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department.
— Andrew Carnegie

As I grow older, I pay less attention to what men say. I just watch what they do.
— Andrew Carnegie

Concentrate your energies, your thoughts and your capital. The wise man puts all his eggs in one basket and watches the basket.
— Andrew Carnegie

Concentration is my motto – first honesty, then industry, then concentration.
— Andrew Carnegie

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Monday, 24th May 2010

Quotes Donald Trump

Written by George Traganidas Topics: Quotes

Donald Trump

A little more moderation would be good. Of course, my life hasn’t exactly been one of moderation.
— Donald Trump

As long as your going to be thinking anyway, think big.
— Donald Trump

Everything in life is luck.
— Donald Trump

Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you’re generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don’t make.
— Donald Trump

I don’t make deals for the money. I’ve got enough, much more than I’ll ever need. I do it to do it.
— Donald Trump

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Monday, 24th May 2010

Quotes Henry Ford

Written by George Traganidas Topics: Quotes

Henry Ford

A bore is a person who opens his mouth and puts his feats in it.
— Henry Ford

A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.
— Henry Ford

A business that makes nothing but money is a poor business.
— Henry Ford

A market is never saturated with a good product, but it is very quickly saturated with a bad one.
— Henry Ford

An idealist is a person who helps other people to be prosperous.
— Henry Ford

Any colour – so long as it’s black.
— Henry Ford

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Monday, 24th May 2010

Quotes Benjamin Franklin

Written by George Traganidas Topics: Quotes

Benjamin Franklin

A countryman between two lawyers is like a fish between two cats.
— Benjamin Franklin

A good conscience is a continual Christmas.
— Benjamin Franklin

A great empire, like a great cake, is most easily diminished at the edges.
— Benjamin Franklin

A house is not a home unless it contains food and fire for the mind as well as the body.
— Benjamin Franklin

A learned blockhead is a greater blockhead than an ignorant one.
— Benjamin Franklin

A life of leisure and a life of laziness are two things. There will be sleeping enough in the grave.
— Benjamin Franklin

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Monday, 24th May 2010

Quotes Bill Gates

Written by George Traganidas Topics: Quotes

Bill Gates

640K ought to be enough for anybody.
— Bill Gates

As we look ahead into the next century, leaders will be those who empower others.
— Bill Gates

At Microsoft there are lots of brilliant ideas but the image is that they all come from the top – I’m afraid that’s not quite right.
— Bill Gates

Be nice to nerds. Chances are you’ll end up working for one.
— Bill Gates

DOS is ugly and interferes with users’ experience.
— Bill Gates

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Monday, 24th May 2010

Quotes Leonardo da Vinci

Written by George Traganidas Topics: Quotes

Leonardo da Vinci

A well-spent day brings happy sleep.
— Leonardo da Vinci

All our knowledge has its origins in our perceptions.
— Leonardo da Vinci

Although nature commences with reason and ends in experience it is necessary for us to do the opposite, that is to commence with experience and from this to proceed to investigate the reason.
— Leonardo da Vinci

Anyone who conducts an argument by appealing to authority is not using his intelligence; he is just using his memory.
— Leonardo da Vinci

Art is never finished, only abandoned.
— Leonardo da Vinci

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Monday, 24th May 2010

Quotes Plato

Written by George Traganidas Topics: Quotes

Plato

A good decision is based on knowledge and not on numbers.
— Plato

A hero is born among a hundred, a wise man is found among a thousand, but an accomplished one might not be found even among a hundred thousand men.
— Plato

A state arises, as I conceive, out of the needs of mankind; no one is self-sufficing, but all of us have many wants.
— Plato

All men are by nature equal, made all of the same earth by one Workman; and however we deceive ourselves, as dear unto God is the poor peasant as the mighty prince.
— Plato

All the gold which is under or upon the earth is not enough to give in exchange for virtue.
— Plato

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Monday, 24th May 2010

Quotes Anthony Robbins

Written by George Traganidas Topics: Quotes

Anthony Robbins

A real decision is measured by the fact that you’ve taken a new action. If there’s no action, you haven’t truly decided.
— Anthony Robbins

Beliefs have the power to create and the power to destroy. Human beings have the awesome ability to take any experience of their lives and create a meaning that disempowers them or one that can literally save their lives.
— Anthony Robbins

For changes to be of any true value, they’ve got to be lasting and consistent.
— Anthony Robbins

How am I going to live today in order to create the tomorrow I’m committed to?
— Anthony Robbins

I challenge you to make your life a masterpiece. I challenge you to join the ranks of those people who live what they teach, who walk their talk.
— Anthony Robbins

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Monday, 24th May 2010

Quotes Socrates

Written by George Traganidas Topics: Quotes

Socrates

A system of morality which is based on relative emotional values is a mere illusion, a thoroughly vulgar conception which has nothing sound in it and nothing true.
— Socrates

All men’s souls are immortal, but the souls of the righteous are immortal and divine.
— Socrates

An honest man is always a child.
— Socrates

As for me, all I know is that I know nothing.
— Socrates

As to marriage or celibacy, let a man take which course he will, he will be sure to repent.
— Socrates

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Monday, 24th May 2010

Quotes Mark Twain

Written by George Traganidas Topics: Quotes

Mark Twain

A man cannot be comfortable without his own approval.
— Mark Twain

A man is never more truthful than when he acknowledges himself a liar.
— Mark Twain

A man who carries a cat by the tail learns something he can learn in no other way.
— Mark Twain

A man’s character may be learned from the adjectives which he habitually uses in conversation.
— Mark Twain

A person who won’t read has no advantage over one who can’t read.
— Mark Twain

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Monday, 24th May 2010

Quotes Warren Buffett

Written by George Traganidas Topics: Quotes

Warren Buffett

A public-opinion poll is no substitute for thought.
— Warren Buffett

Beware of geeks bearing formulas.
— Warren Buffett

Chains of habit are too light to be felt until they are too heavy to be broken.
— Warren Buffett

Derivatives are financial weapons of mass destruction.
— Warren Buffett

I always knew I was going to be rich. I don’t think I ever doubted it for a minute.
— Warren Buffett

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Monday, 24th May 2010

Quotes Aristotle

Written by George Traganidas Topics: Quotes

Aristotle

A constitution is the arrangement of magistracies in a state.
— Aristotle

A friend to all is a friend to none.
— Aristotle

A great city is not to be confounded with a populous one.
— Aristotle

A sense is what has the power of receiving into itself the sensible forms of things without the matter, in the way in which a piece of wax takes on the impress of a signet-ring without the iron or gold.
— Aristotle

A tragedy is a representation of an action that is whole and complete and of a certain magnitude. A whole is what has a beginning and middle and end.
— Aristotle

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Monday, 24th May 2010

Quotes Albert Einstein

Written by George Traganidas Topics: Quotes

Albert Einstein

Everyone is a genius. But if you judge a fish on its ability to climb a tree, it will live its whole life believing that it is stupid.
— Albert Einstein

A man should look for what is, and not for what he thinks should be.
— Albert Einstein

A perfection of means, and confusion of aims, seems to be our main problem.
— Albert Einstein

A person who never made a mistake never tried anything new.
— Albert Einstein

A question that sometimes drives me hazy: am I or are the others crazy?
— Albert Einstein

A table, a chair, a bowl of fruit and a violin; what else does a man need to be happy?
— Albert Einstein

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Tuesday, 6th April 2010

Learn from Warren Buffett’s personal portfolio

Written by George Traganidas Topics: Articles, Stock Investing

I read an article the other day by Robert Miles on the website of Morningstar that talked about the personal portfolio of Warren Buffett. That is the stocks that Warren has in his name and not under Berkshire Hathaway. I include here the major points from this article:

Buffett’s private portfolio represents less than five percent of his net worth, but that five percent is substantial by anyone’s measure–with a recent value of $1.8 billion. Certainly worth paying attention to.

This also answers the question often asked, “How does Warren Buffett live on a salary of $100,000 per year, with one of the lowest CEO compensation packages among the Fortune 500 companies?”[…]

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Friday, 12th March 2010

Charlie Munger on How to Get Rich

Written by George Traganidas Topics: Habits, Stock Investing

1. Measure risk
All investment evaluations should begin by measuring risk, especially reputational.
In 2003-2007, investors loved banks because they were big and made lots of money. What few asked was how much risk they were taking on. Those who properly analyze how much risk the run-ups have added will end up happiest.

2. Be independent
Only in fairy tales are emperors told they’re naked.
Maybe the hardest part of investing is that the greatest odds of being right come when most think you’re wrong, and vice versa.[…]

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Thursday, 25th February 2010

How We Can Restore Confidence

Written by George Traganidas Topics: Articles, Stock Investing

The Washington Post
By Charles T. Munger
February 11, 2009

Our situation is dire. Moderate booms and busts are inevitable in free-market capitalism. But a boom-bust cycle as gross as the one that caused our present misery is dangerous, and recurrences should be prevented. The country is understandably depressed — mired in issues involving fiscal stimulus, which is needed, and improvements in bank strength. A key question: Should we opt for even more pain now to gain a better future? For instance, should we create new controls to stamp out much sin and folly and thus dampen future booms? The answer is yes.[…]

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Thursday, 25th February 2010

Basically, It’s Over

Written by George Traganidas Topics: Articles, Stock Investing

Slate
By Charles Munger
Sunday, Feb. 21, 2010

In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature’s bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island “Basicland.”

The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Property rights were greatly respected and strongly enforced. The banking system was simple. It adapted to a national ethos that sought to provide a sound currency, efficient trade, and ample loans for credit-worthy businesses while strongly discouraging loans to the incompetent or for ordinary daily purchases.[…]

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Thursday, 25th February 2010

Mr. Buffett on the Stock Market

Written by George Traganidas Topics: Articles, Stock Investing

Fortune
By Warren Buffett
November 22, 1999

The most celebrated of investors says stocks can’t possibly meet the public’s expectations. As for the Internet? He notes how few people got rich from two other transforming industries, auto and aviation.

Warren Buffett, chairman of Berkshire Hathaway, almost never talks publicly about the general level of stock prices–neither in his famed annual report nor at Berkshire’s thronged annual meetings nor in the rare speeches he gives. But in the past few months, on four occasions, Buffett did step up to that subject, laying out his opinions, in ways both analytical and creative, about the long-term future for stocks. FORTUNE’s Carol Loomis heard the last of those talks, given in September to a group of Buffett’s friends (of whom she is one), and also watched a videotape of the first speech, given in July at Allen & Co.’s Sun Valley, Idaho, bash for business leaders. From those extemporaneous talks (the first made with the Dow Jones industrial average at 11,194), Loomis distilled the following account of what Buffett said. Buffett reviewed it and weighed in with some clarifications.[…]

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Thursday, 25th February 2010

Who Really Cooks the Books?

Written by George Traganidas Topics: Articles, Stock Investing

The New York Times
By Warren E. Buffett
Published: July 24, 2002

OMAHA— There is a crisis of confidence today about corporate earnings reports and the credibility of chief executives. And it’s justified.

For many years, I’ve had little confidence in the earnings numbers reported by most corporations. I’m not talking about Enron and WorldCom — examples of outright crookedness. Rather, I am referring to the legal, but improper, accounting methods used by chief executives to inflate reported earnings.

The most flagrant deceptions have occurred in stock-option accounting and in assumptions about pension-fund returns. The aggregate misrepresentation in these two areas dwarfs the lies of Enron and WorldCom.[…]

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Thursday, 25th February 2010

Fuzzy Math And Stock Options

Written by George Traganidas Topics: Articles, Stock Investing

The Washington Post
By Warren Buffett
Tuesday, July 6, 2004

Until now the record for mathematical lunacy by a legislative body has been held by the Indiana House of Representatives, which in 1897 decreed by a vote of 67 to 0 that pi — the ratio of the circumference of a circle to its diameter — would no longer be 3.14159 but instead be 3.2. Indiana schoolchildren momentarily rejoiced over this simplification of their lives. But the Indiana Senate, composed of cooler heads, referred the bill to the Committee for Temperance, and it eventually died.

What brings this episode to mind is that the U.S. House of Representatives is about to consider a bill that, if passed, could cause the mathematical lunacy record to move east from Indiana. First, the bill decrees that a coveted form of corporate pay — stock options — be counted as an expense when these go to the chief executive and the other four highest-paid officers in a company, but be disregarded as an expense when they are issued to other employees in the company. Second, the bill says that when a company is calculating the expense of the options issued to the mighty five, it shall assume that stock prices never fluctuate.[…]

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Thursday, 25th February 2010

10 Ways To Get Rich

Written by George Traganidas Topics: Articles, Habits, Personal Finance, Stock Investing

Parade
By Warren Buffett
published: 09/07/2008

With an estimated fortune of $62 billion, Warren Buffett is the richest man in the entire world. In 1962, when he began buying stock in Berkshire Hathaway, a share cost $7.50. Today, Buffett, 78, is Berkshire’s chairman and CEO, and one share of the company’s class A stock is worth close to $119,000. He credits his astonishing success to several key strategies, which he has shared with writer Alice Schroeder. She spent hundreds of hours interviewing the Sage of Omaha for the new authorized biography The Snowball. Here are some of Buffett’s money-making secrets—and how they could work for you.

1. Reinvest your profits
When you first make money, you may be tempted to spend it. Don’t. Instead, reinvest the profits. Buffett learned this early on. In high school, he and a pal bought a pinball machine to put in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Buffett used the proceeds to buy stocks and to start another small business. By age 26, he’d amassed $174,000—or $1.4 million in today’s money. Even a small sum can turn into great wealth.[…]

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Thursday, 25th February 2010

Buy American. I Am.

Written by George Traganidas Topics: Articles, Stock Investing

New York Times
By WARREN E. BUFFETT
Published: October 16, 2008

The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.[…]

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Wednesday, 24th February 2010

The Greenback Effect

Written by George Traganidas Topics: Articles, Stock Investing

New York Times
By WARREN E. BUFFETT
Published: August 18, 2009

In nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.[…]

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Wednesday, 24th February 2010

Top tips for business success

Written by George Traganidas Topics: Habits

If you are looking to start your own business you might want to consider the sound advice of famous business people. These people have already trodden the path to business success and you can take advantage of their wisdom. The following list is a collection of business tips and general words of wisdom:

1. All successful people have a vision. They have the ability the “see” clearly what they want before it exists. – Bill Gates[…]

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Monday, 8th February 2010

“Think Big and Kick Ass! in Business and Life” by Donald Trump and Bill Zanker

Written by George Traganidas Topics: Books, Habits, Personal Finance

Think big and kick ass, Donald Trump

This is one of the latest books of Donald Trump that he wrote together with Bill Zanker from the Learning Annex. They draw from their experiences in life to provide practical advice on how to think big in your life and achieve what you want. Donald gives many examples from real estate and his experience with dealing with famous people. Bill’s prospective is different. He draws his examples from the struggles that he had in starting the Learning Annex and transforming it into a successful company.

They recommend that is very important to find your passion and follow it. Do not do something for money, but because you are passionate about it. Then the money will follow. You need to go after your passion with 150% focus and to focus on the solutions to the problems that you will encounter and do not be dishearten by the problems.[…]

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Wednesday, 13th January 2010

How to measure investment performance

Written by George Traganidas Topics: Stock Investing

As investors, it is very important to keep track of our yearly returns. Returns should be compared with a benchmark and our job is to beat the benchmark. If you can not beat the benchmark then it is better to buy it. This will save us money and time in the long run. There are certain things to consider when you measure performance:

1) Define your investment fund

First of all we must know what we measure. For example, assume we have a trading account of £10,000 and we decide to buy 1000 shares of Company X for £5.00 per share. Once we buy the shares, we will have in our account £5,000 in cash and 1000 shares of company X worth 5,000. Now assume that by the end of the year the shares increased in value and they are worth £6.00 per share. We can calculate our return in 2 ways:[…]

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Tuesday, 8th December 2009

Warren Buffett Investment Lessons, part 7

Written by George Traganidas Topics: Stock Investing

How he runs Berkshire Hathaway

In 1992, Warren Buffett say that Berkshire’s after-tax overhead costs are under of 1% of reported operating earnings and less than 1/2 of 1% of look-through earnings. In 1996, the after-tax headquarters expense amounts to less than two basis points (1/50th of 1%) measured against net worth.

Warren Buffett does not believe in flexible operating budgets, as in “Non-direct expenses can be X if revenues are Y, but must be reduced if revenues are Y – 5%”. In addition, it makes no sense to add unneeded people or activities because profits are booming, or cutting essential people or activities because profitability is shrinking.[…]

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Tuesday, 8th December 2009

Warren Buffett Investment Lessons, part 6

Written by George Traganidas Topics: Stock Investing

Debt and Leverage

Warren Buffett prefers to get finance (debt) in anticipation of need rather than in reaction to it. Warren Buffet has an aversion to debt, particularly the short-term kind. He is willing to incur modest amounts of debt when it is both properly structured and of significant benefit to shareholders.

Warren Buffett does not like leverage. Even if the odds of disaster are 99:1, he does not like them. A small chance of distress or disgrace cannot, in our view, be offset by a large chance of extra returns. If your actions are sensible, you are certain to get good results.[…]

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Tuesday, 8th December 2009

Warren Buffett Investment Lessons, part 5

Written by George Traganidas Topics: Stock Investing

Economic franchises

An economic franchise is a product or service that:

  • Is needed or desired
  • Is thought by its customers to have no close substitute
  • Is not subject to price regulation

The company can regularly price its product or service aggressively and earn high rates of return on capital. Franchises can tolerate mis-management, because the managers might diminish the franchise’s profitability but they cannot inflict mortal damage.

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Tuesday, 8th December 2009

Three suggestions of investors

Written by George Traganidas Topics: Stock Investing

After many years of investing, Warren Buffett has some suggestions for investors.


First, beware of companies displaying weak accounting. If a company still does not expense options, or if its pension assumptions are fanciful, watch out. When managements take the low road in aspects that are visible, it is likely they are following a similar path behind the scenes. There is seldom just one cockroach in the kitchen.[…]

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Tuesday, 8th December 2009

The formula for valuing assets

Written by George Traganidas Topics: Property Investing, Stock Investing

In one of his letters to the shareholders of Berkshire Hathaway, Warren Buffett told them what is the formula to value any assett.

The formula for valuing all assets that are purchased for financial gain has been unchanged since it was first laid out by a very smart man in about 600 B.C. (though he wasn’t smart enough to know it was 600 B.C.).

The oracle was Aesop and his enduring, though somewhat incomplete, investment insight was “a bird in the hand is worth two in the bush.” To flesh out this principle, you must answer only three questions. How certain are you that there are indeed birds in the bush? When will they emerge and how many will there be? What is the risk-free interest rate (which we consider to be the yield on long-term U.S. bonds)? If you can answer these three questions, you will know the maximum value of the bush ¾ and the maximum number of the birds you now possess that should be offered for it. And, of course, don’t literally think birds. Think dollars.[…]

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Tuesday, 8th December 2009

Warren Buffett Investment Lessons, part 4

Written by George Traganidas Topics: Stock Investing

Management

Making the most of an existing strong business franchise is what usually produces exceptional economics. Managers need to protect their franchise, control costs, search for new products and markets that build on their existing strengths and do not get diverted. They need to work exceptionally hard at the details of the business. He advocates leaving management alone to do their job.

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

Only do business with people that you like, trust and admire.[…]

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Tuesday, 8th December 2009

Warren Buffett Investment Lessons, part 3

Written by George Traganidas Topics: Stock Investing

Be a successful investor

You do not have to make it back the way that you lost it.

I would rather be certain of a good result than hopeful of a great one.

To be successful, concentrate on identifying one foot hurdles that you could step over rather than acquire any ability to clear seven footers. An investor needs to do very few things right as long as he/she avoids big mistakes.

In each case you want to acquire, at a sensible price, a business with excellent economics and able and honest management. Thereafter, you need only to monitor whether these qualities are being preserved.

When carried out capably, an investment strategy of that type will often result in its practitioner owning a few securities that will come to represent a very large portion of his portfolio. This investor would get a similar result if he followed a policy of purchasing an interest in, say, 20% of the future earnings of a number of outstanding college basketball stars. A handful of these would go on to achieve NBA stardom, and the investor’s take from them would soon dominate his royalty stream. To suggest that this investor should sell off portions of his most successful investments simply because they have come to dominate his portfolio is akin to suggesting that the Bulls trade Michael Jordan because he has become so important to the team.[…]

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Tuesday, 8th December 2009

Warren Buffett Investment Lessons, part 2

Written by George Traganidas Topics: Stock Investing

Buying a business

Here are the thought of Warren Buffett on what to look for when you are considering buying a business. It must have a good management team, good future economics for the business and the price you pay must be right. The business itself should have the ability to increase prices easily (even when product demand is flat and capacity is not fully utilized) without fear of significant loss of either market share or unit volume. You should be able to accommodate large dollar volume increases in business with only minor addition of investment of capital. The best business to own is one that over an extended period can employee large amounts of incremental capital at very high rates of return.

The following are dismal economic characteristics that make for a poor long-term outlook for a business:[…]

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Thursday, 3rd December 2009

How to Minimize Investment Returns

Written by George Traganidas Topics: Stock Investing

In his Berkshire Hathaway annual report of 2006, Warren Buffet wrote an article that explained how investors were achieving lower returns by employing professional help. Below if the full test.


Over the century American businesses did extraordinarily well and investors rode the wave of their prosperity. Businesses continue to do well. But now shareholders, through a series of self-inflicted wounds, are in a major way cutting the returns they will realize from their investments.

The explanation of how this is happening begins with a fundamental truth: With unimportant exceptions, such as bankruptcies in which some of a company’s losses are borne by creditors, the most that owners in aggregate can earn between now and Judgment Day is what their businesses in aggregate earn. True, by buying and selling that is clever or lucky, investor A may take more than his share of the pie at the expense of investor B. And, yes, all investors feel richer when stocks soar. But an owner can exit only by having someone take his place. If one investor sells high, another must buy high. For owners as a whole, there is simply no magic – no shower of money from outer space – that will enable them to extract wealth from their companies beyond that created by the companies themselves.[…]

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Tuesday, 27th October 2009

Warren Buffett Investment Lessons, part 1

Written by George Traganidas Topics: Stock Investing

This is an edited version of a letter Warren Buffett sent some years ago to a man who had indicated that he might want to sell his family business.


Some Thoughts on Selling Your Business

Dear _____________:

Here are a few thoughts pursuant to our conversation of the other day.

Most business owners spend the better part of their lifetimes building their businesses. By experience built upon endless repetition, they sharpen their skills in merchandising, purchasing, personnel selection, etc. It’s a learning process, and mistakes made in one year often contribute to competence and success in succeeding years.

In contrast, owner-managers sell their business only once — frequently in an emotionally-charged atmosphere with a multitude of pressures coming from different directions. Often, much of the pressure comes from brokers whose compensation is contingent upon consummation of a sale, regardless of its consequences for both buyer and seller. The fact that the decision is so important, both financially and personally, to the owner can make the process more, rather than less, prone to error. And, mistakes made in the once-in-a-lifetime sale of a business are not reversible.[…]

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Wednesday, 22nd July 2009

“The Snowball: Warren Buffett and the Business of Life” by Alice Schroeder

Written by George Traganidas Topics: Books, Habits, Personal Finance, Stock Investing

Snowball, Warren Buffett

This is a great book for anyone who is interested to invest in the stock market and run a business. The book describes the life of Warren Buffett from the day he was born up to 2008. The lessons are drawn from both his personal and his professional life.

Warren got involved in a very young age in the process of making money and managing other people’s money. When he was a kid he took his sister’s money to invest in a stock. This stock went down and everyday his sister would ask him why the stock is down. Warren did not like that experience at all and from that day on he did not want to manage other’s people money unless he knew he could do a great job. This gave birth to his first rule of investment “Never lose the money.”

You can find a lot of details on his management style in the book and how he pushes his people to get the best out of them.[…]

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Monday, 22nd June 2009

“One Up On Wall Street” by Peter Lynch

Written by George Traganidas Topics: Books, Stock Investing

One Up On Wall Street

This book is one of the classics on stock investments. Peter Lynch was the head of the Magellan Fund in Fidelity Investments from 1977 to 1990 and the fund average was 29.2% return during that period. This is a very impressive return when you consider that the market average is about 11% and that 80% of the fund managers fails to beat the average.

In this book, Peter Lynch shares some of his secrets on how he managed to get this returns and explains how ordinary investors can do the same and achieve higher returns that the professionals. He introduces ideas like the “ten bagger” that refer to an investment which is worth ten times its original purchase price.[…]

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Wednesday, 3rd June 2009

Never sell a stock

Written by George Traganidas Topics: Personal Finance, Stock Investing

One of the biggest challenges that people face when they buy stocks is to decide when to sell them. This decision is as important as deciding which stock to buy. Even Warren Buffet, the legendary buy and hold investor, is selling stocks if he believes that he can find a better place for his capital.

First of all, you should never sell simply because a stock—and the market in general – goes down several percentage points. Selling on this basis alone is an overreaction that usually costs you money in the long run. Don’t waste your time on trying to time the market. Instead, you want to know your stocks well enough to be able to recognize which events spell danger and which scream opportunity.

Here, then, are some pointers to help you decide whether to stay the course or sell—for the right reasons:[…]

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Thursday, 14th May 2009

Be successful like Donald Trump, part 5

Written by George Traganidas Topics: Habits, Property Investing

Donald Trump

I finished watching the fifth series of “The Apprentice” recently and it is time to write the usual summary about Donald’s advice to be successful. The people who are regular readers of this blog should know by know the main themes from the previous series. Series five moves on similar lines. The focus of Donald Trump should be clear by now.

Donald’s advice follows again the main lines of the previous four series. I think that he has made his point in the previous episodes and now he just repeats it over and over again. That is good in a way, because you can understand which points he stresses a lot and which ones are not so vital. And as the ancient Greeks used to say “Repetition is the mother of learning”.

His advice on series five is the following:[…]

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Thursday, 30th April 2009

How to evaluate the management of a company

Written by George Traganidas Topics: Stock Investing

One of the most important things to look at before you invest in a company is the quality of the management team. After all, you are buying a part of a company and you want the people who are running it to be of the best quality. Consider four major areas when seeking out top-quality […]

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Tuesday, 24th February 2009

Be successful like Donald Trump, part 4

Written by George Traganidas Topics: Habits, Property Investing

Donald Trump

The fourth season of “The Apprentice” was one of the best. The candidates were very strong and you are glued to your couch till the last minute. The final 2 are very both great and there is a little twist at the end of the series.

Donald here repeats his valuable advice through the series again. The topics are similar as the previous ones and you start to understand how he thinks. He focuses again on the importance of money, always thinking big and having a winning team around you. You can see that this is how Donald has built his empire. He combined these 3 elements (and a few more) and he built his empire. The tasks that the teams perform follow similar concepts as the previous series. They range from marketing, to selling, to creating ideas and of course teamwork and leading people.

Here is the advice given from Donald Trump in the […]

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Tuesday, 24th February 2009

Invest like Warren Buffett

Written by George Traganidas Topics: Stock Investing

Warren Buffet has been characterised as the greatest investor of all times. He buys great companies in fair values and holds them forever. He is very successful and he has managed to become the wealthiest person on Earth.

There are many people who are wondering how he does this. They are trying to do the same thing as Warren and achieve similar results. One way that this can be done is by buying the same companies he buys at similar prices or better. This is not always easily done, because a lot of times he reveals his positions months after he has done the purchases.[…]

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Tuesday, 10th February 2009

Has Warren Buffett lost his touch?

Written by George Traganidas Topics: Articles, Personal Finance, Stock Investing

It is always useful to see both sides in an argument. This increases your understanding of the situation and hopefully will help you to make better decisions. I have been following Warren Buffett very closely in the last 3 years and I have been reading articles written about him and his investment and management style. Everyone is praising him for being a very good investor and being able to attract great companies.

There is one person though who is betting against him. Who tells that his time is over and he has lost his charm. This person is Doug Kass and the last few months he wrote articles on why Warren is wrong and why his style does not work any more. His articles and reasoning are very interesting. His main point is that his style is not applicable to this new age and following it will cause you to lose money.[…]

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Tuesday, 13th January 2009

Be successful like Donald Trump, part 3

Written by George Traganidas Topics: Habits, Property Investing

Donald Trump

After watching Series 1 & 2 I was really looking forward to watch the third one. I find the advice that Donald gives valuable and I think it can help people become winners.

The third series of “The Apprentice” is full with more advice on the same topics. By now you will start to see certain topics repeating themselves. Donald is big on thinking big and leading with authority. This is where Donald places his focus and what has helped him to build his empire.

It is surprising that Donald refers to the same topics again and again. The candidates in the series keep doing the same mistakes. Please make sure that you do not repeat your mistakes. Learn from them and improve.

Here is the advice from Donald Trump give in the third series:[…]

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Tuesday, 16th December 2008

Be successful like Donald Trump, part 2

Written by George Traganidas Topics: Habits, Property Investing

Donald Trump

Last week I covered the advice that was given by Donald Trump in the first part of the series “The Apprentice”. This advice is covering practical ways that can help people become more successful in business and become better leaders. I think that these are steps that Donald has followed and he lives by. These steps have helped him to build his huge empire and become a billionaire.

The second series continues in a similar style. A new group of people face business challenges every week and hope to work for Donald. The tasks are similar to the first series, but the pressure is more and the deadlines are more aggressive. Donald continues to evaluate the performance of the teams each week and give feedback and advice.

Here are his gems of wisdom from the second series:[…]

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Thursday, 11th December 2008

Be successful like Donald Trump, part 1

Written by George Traganidas Topics: Habits, Property Investing

Donald Trump

I came across the other day a series called “The Apprentice”. I am not a big fun of reality TV, but a friend recommended that I should watch this, because it is different and full of practical advice on how to succeed and run a business. As you know by now, I am very interested in practical advice and I thought of giving it a go and see what Donald Trump has to share.

I was pleasantly surprised by “The Apprentice”. It is all about business and how to be successful. Each week Donald gives the candidates a business task to complete and then at the end he judges them on how they did and gives his advice on what they did wrong. The tasks range from creating products to marketing to creating and running a business. The advice that Donald gives is great.

I was pleasantly surprised by “The Apprentice”. It is all about business and how to be successful. […]

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Tuesday, 2nd December 2008

The practical way to riches, part 6

Written by George Traganidas Topics: Habits, Personal Finance

This is the last post of this series. By now you must have a very clear idea of the practical way to riches. I have shared with you practical ideas that I have learned over the years. Most of the richest people in the world have followed the exact same ideas to build their wealth. What surprises me is that many people are failing to follow these simple steps and they are struggling so much today.

Today I will share with you the last idea. You might not realize the benefit of this one in the beginning and you might not even understand why this is important. I would recommend that you just look around you and decide if it is something that makes sense and you want to do as well. This is something that I did unconsciously some years ago and now I am happy I did it.[…]

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Thursday, 27th November 2008

The practical way to riches, part 5

Written by George Traganidas Topics: Habits, Personal Finance

By now you must have a clear idea of the practical way to riches. To summarise what we said before, you need to follow these practical steps. You must put aside money every month that you will use for investments. You must save money every month that will cover you in case of emergency. You must control your expenses and spend less than what you earn. Finally, you must seek advice from competent people on a way to invest your money.

The above steps must become your habits. Every month you must do them like you brush your teeth every morning. Where most people fail is that they follow this advice for a while and then they relax and skip a few months. In the end, they just do it whenever they remember or when they have money left over. This is a disaster and it will make you to fail. This step will help you to resist the temptation of going down that path. It is a very critical step.[…]

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Tuesday, 18th November 2008

“Successful Property Letting” by David Lawrenson

Written by George Traganidas Topics: Books, Property Investing

Successful Property Letting

I was curious about this book, because it was written by a UK author and it covered how to let your property in the UK market. Its reviews were good and I decided to have a look. After I finished reading it I agreed that it is a very useful and informative book.

David is very down-to-earth and he explains in his book the whole process of how to search for a property and how to select the appropriate one. He gives guidelines on how to rent it and most importantly how to manage your tenants. In the end, he gives more advice on tax and other general issues. As the title says, he puts more focus on the letting side of property than on the buying side. He covers the buying at the start of the book, but the main focus is on how to be a successful landlord.[…]

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Tuesday, 18th November 2008

The practical way to riches, part 4

Written by George Traganidas Topics: Habits, Personal Finance

The last posts have covered the basic steps of the practical way to riches. In order to become rich, you must put aside money every month to invest in projects. In addition, you need to save money every month to cover any emergencies that might happen along the way. The last thing we covered was the need to control your expenses, so you can enjoy life and build your wealth.

Now it is time to get into more depth about the creation of wealth. We have built a good basis by spending less than we earn and saving money for troubled times. We started to build a sum of money to invest to expand our wealth. Now it is time to invest this sum of money and make it work for us. Make the money produce more money without us having to be involved. This is the secret.[…]

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Tuesday, 11th November 2008

“The Wordly Philosophers” by Robert Heilbroner

Written by George Traganidas Topics: Books, Personal Finance

Worldly Philosophers

I just finished “The Wordly Philosophers” by Robert Heilbroner. It is a very interesting book that looks into the lives and teachings of great economists like Adam Smith, Carl Marx and focuses on their lives and how their every day life has influenced their theories.

This book does not provide any practical steps on how to become a great economist or any other secrets. It reviews the theories of these people that have shaped the world today. Therefore, you might wonder why I review it.

The reason why I decided to write about it is because it can help you with achieving wealth.[…]

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Tuesday, 11th November 2008

The practical way to riches, part 3

Written by George Traganidas Topics: Habits, Personal Finance

In the last two posts we talked about the first two habits on the practical way to riches. These two habits are putting aside money to invest and save. This first will help you grow your wealth and the second will help you in a case of emergency. We need to plan well and get organized if we want to get rich.

Today’s post is about the third habit. The first two habits talked about managing the money that is flowing in. Now it is time to monitor the money that is flowing out. This is a very painful topic for many people and also an eye opener. If you do not get a good handle on this habit, then nothing else matters. You are moving away from riches fast.[…]

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Tuesday, 4th November 2008

“Think and Grow Rich” by Napoleon Hill

Written by George Traganidas Topics: Books, Habits, Personal Finance

Think and Grow Rich

This book is a classic one about wealth creation and it covers practical and theoretical ways on how to achieve this. It is structured in 13 steps that you can follow to achieve wealth. Most of the focus of the book is on the mindset, as the title implies. Think and grow rich, not work and grow rich.

It guides you to build a goal for your future in step 1 and then in the following steps it talks about how to move towards that goal. Near the end it starts to focus more on traits that you need to have to achieve the goal and also it has some very nice questionnaires for self analysis. These are useful to see where you are aiming at, but it does not provide steps on how to achieve them.[…]

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Tuesday, 4th November 2008

The practical way to riches, part 2

Written by George Traganidas Topics: Habits, Personal Finance

Last week, we talked about the first habit on the practical way to riches. The first habit is to put aside some money each month so you can invest it and make the money work for you.

The second habit is as important as the first one. The first one will help you to expand your wealth and start to earn more. What we must pay attention to is that the wealth that we build is built on a strong foundation. The second habit will help to prevent a bad event of destroying our progress.[…]

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Tuesday, 28th October 2008

The practical way to riches, part 1

Written by George Traganidas Topics: Habits, Personal Finance

The Practical Way to riches

If you want to become rich you need to develop certain habits. Being rich is a state of mind and a collection of habits. Money is used to keep count. I have been looking into this area the last few years and I have noticed certain patterns that emerge.

One of the biggest ideas and misconceptions about becoming rich is that rich people are born rich. This is wrong. There are countless examples that prove the opposite, but people think that these are the exceptions. What you must realise is that these people have some habits in common. These habits are not specific to a region/race/sex/age/year. They can be universally applied. In the next series of posts I will discuss these habits in detail.

Habit 1 – Invest your money

Rich people make their money work for them. They do not work for their money.[…]

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Tuesday, 28th October 2008

“Why We Want You to Be Rich” by Robert Kiyosaki and Donald Trump

Written by George Traganidas Topics: Books, Habits, Personal Finance

Robert Kiyosaki and Donald Trump

This is a very interesting book that is written by two great authors. The book is packed with good material about the things you need to focus to get rich. It spends some time in the beginning to tell you why you need to get rich and why depending on a job and the government to look after you is not a wise decision.

I found that Robert is repeating his mantras here, a lot. If you have read some of his other books I do not think you will read anything new here. Maybe some bits here and there, but nothing amazing. Donald is a bit more original than his usual books. His parts in the book are smaller that Robert’s, but I found they contain much more practical steps on how to think big and negotiate. […]

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Tuesday, 28th October 2008

How to profit in tough times

Written by George Traganidas Topics: Guest Speakers, Personal Finance, Spread Betting

I have asked a friend of mine to write a guest post for this blog. My friend is a person who is very keen on action and I asked her to share her thought on these tough times that the economy is going through. Here is the practical way she is dealing with the downturn:


TOUGH TIMES AHEAD!!! Well at least that’s what all the tabloids have been screaming for some time now. Will it change? How long will it last? Who’s to blame? Who knows!!! BUT the famous saying of what goes up must come down, can be positively correlated with ‘where there’s a winner there’s always a loser’ and vice versa. So in dark down-turning times such as these, who is silently sitting in the corner smirking as they watch the markets take a dive? […]

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Sunday, 12th October 2008

“Breakthrough to success” NLP seminar with Chris Howard

Written by George Traganidas Topics: Habits, NLP, Personal Finance, Presentations, Seminars

Breakthrough to success with Chris Howard

In June, I went to the Breakthrough to Success seminar by Christopher Howard. It was such an awesome event. Chris rocks. He has studied NLP and hypnosis for years and it shows every minute he is on stage. I have studied NLP as well, but I have never seen anyone put it to practice so well. Every move and every word he says are calculated and full of meaning.

In the seminar he covers the areas of wealth, personal growth, career, relationships and family. The best thing is that he shows you the skills to use to achieve what you want in the areas and you practice them with him. So, you gain a lot of insight on the practical application of these tools. […]

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Sunday, 28th September 2008

Setting smart goals

Written by George Traganidas Topics: Goals, Habits

Smart Goal Setting

Have you ever set a goal that you wanted to achieve, but it seems to take ages to achieve it? Have you set a goal and after a while you are questioning yourself if it is still a valid goal and if you should put more effort to achieve it? I had this happen to me often in the past and I think that I have found the answer.

Before I give you the answer let me ask you a different question. What is your purpose? What is the big goal? Now, if you do not have clear answers to these questions, this will cause you problems in the medium run. Let me explain.

All of us need a big goal, something that we are moving towards to. For example, I want by the age of 40 to sail around the Greek islands for 3 months. Using this goal for example, we can start to build towards it. You can even say that this goal is not big enough and it is merely a step to a bigger goal. That is good, work to find the even bigger one. For now we will use this example. […]

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Tuesday, 23rd September 2008

“The 4-Hour Work Week” by Timothy Ferriss

Written by George Traganidas Topics: Books, Habits, Personal Finance, Time Management

The 4-hour Work Week

This is an amazing book and I believe that it is a must read for people who want to get out of the office jobs and experience life to the full. Tim explains how he went from working 80h per week to working 4h per week while at the same time increasing the profits in his company.

In this book he gives the tools and techniques that he used to achieve this and how other people he met during his travel have achieved similar goals. His main process has four steps and he explains them in great depth. At the start, he recommends that you need to define which tasks are important to you and which ones are not. The second step is to eliminate what is not important. Then you automate the ones that are left and then you are ready for the final step, liberation. […]

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Tuesday, 16th September 2008

“Richest Man in Babylon” by George S. Clason

Written by George Traganidas Topics: Books, Personal Finance

Richest Man in Babylon

This is a great book that talks about personal finances. It has many practical steps on how to control your financial situation as well as ideas on how to build wealth. The book is a collection of stories that take place in ancient Babylon. In these stories rich people of that age share their secrets of how they have created their wealth with other citizens of the city. Through these stories you can understand the principles and the actions that these people took and apply them in this modern age. The advice of these people is timeless and is not specific to that time or location. Of course if you try to find a camel trader these days to do business…… good luck with it. […]

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Sunday, 14th September 2008

Steve Jobs speech at Stanford

Written by George Traganidas Topics: Presentations

On 12 June 2005, Steve Jobs gave a speech to the graduates of Stanford University. In his speech he narrated three stories from his life to the students and the meaning that each one of them has and how they shaped his life.

His first story is about connecting the dots. Sometimes events in your life look insignificant at present and only in the future you will realise how important they really are. His second story is about love and loss. In this one Steve explains how he left Apple and how through this loss he became stronger and came back. His last story is about death. People need to enjoy life and not let it pass by them. You need to challenge yourself all the time if you compromise or you live the life you dream. […]

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Friday, 12th September 2008

Tony Robbins speaks at TED

Written by George Traganidas Topics: Habits, NLP, Presentations

Tony Robbins has given an amazing presentation at the Technology, Entertainment and Design (TED) conference. In this presentation he talks about why people act the way they do and what is driving them. It is a 30 min presentation and it is very insightful. Pay attention to his presentation style and also see how in the end he manages to get extra time with a clever technique. […]

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Friday, 12th September 2008

“A Whole New Mind” by Daniel H. Pink

Written by George Traganidas Topics: Books, Habits

Whole New Mind

Have you read the “A whole new mind” from Danieal H. Pink? I just finished it the other week and I think that it is a great book. In his book he explains how we will need to start using our right-brain as much as our left-brain in the years to come. There are three reasons for this: the competition from cheap labour in Asia, the power of computers that replace workers and the abundance of goods.

His opinion is that we need to work on the following six areas to be able to compete effectively in the new market:
[…]

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Thursday, 11th September 2008

Positive cash flow from investment property

Written by George Traganidas Topics: Property Investing

Positive cash flow

For a long time I was searching to find a way to calculate if a property is profitable and I should buy it. I was looking at the cash flow and at the value appreciation of it over the years.

Many property investors were talking about the importance of being able to cash flow a property and the need to have a positive cash flow at the end of the month (or at least a break even). What no one was telling was what you need to include in these calculations. So, after a lot of search here is an extensive list of items to include in the calculation. This list is quite strict and you might need to relax some of them. I have included here everything for the benefit of you and you can make the call if you want to ignore some things. But do it with your eyes open and knowing the consequences. […]

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Wednesday, 10th September 2008

The best investment property

Written by George Traganidas Topics: Property Investing

Investment Property

I have been looking for a long time for a way to evaluate if a property is a good one for investment or not. There are so many properties on the market, but which one is going to make me the most money? That is the question.

I would like to make a distinction here before I go ahead. This article is about properties for investment. It is not about your dream house/flat. You should keep this in your mind all the time. Based on this you should throw all your emotions out of the window. This is all about the numbers. We are looking for a property to make money and not one that looks nice. Therefore, we will at the numbers and not if the living room is cosy. […]

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Tuesday, 9th September 2008

The biggest property market dilemma!

Written by George Traganidas Topics: Property Investing

I have spoken to a lot of people about the property market in the UK and most of them seem to be caught in the eternal dilemma of buying or waiting for things to get better. Of course, the funny thing is they all say that this is not the right time to buy. They say that all the time. If the market is going up they wait for it to go down. If the market is going down they wait for it to go even further down. I think that what they lack is the gut to act and the knowledge on how to invest.

People wait for property to get cheaper and then they will buy. They wait for the prices to hit the bottom and then the great opportunity will appear. The fact is that they will never know where the bottom is. Usually they miss it and they start to buy when prices start to increase again. After a few months, you hear them say “I should have bought earlier”. Yes, you should. […]

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