324- From the Vault: Is an “Event” Required?
“I don’t mind not making money on something that I’m not sure about.” - Phil Town If a company has never had an event but appears to be on sale, is it a good investment? Meeting the requirements of the Four Ms and the Big 5 Numbers just proves that a company is worthy of being on your watchlist, but doesn’t give you the green light to buy just yet. As Rule #1 Investors, we want to buy wonderful companies, yes, but only when they are at the right price. That’s why the last step is to wait patiently to buy stocks when, and only when, they go on sale. Buying a stock on sale helps take the risk out of investing and makes it easier to get fantastic returns. The key to finding stocks on sale is to wait for a Rule #1 event. A Rule #1 event is when something happens that affects the entire market and makes the stock price of a good company drop far below its real value. This could be a recession, a pandemic, an election, you name it. Remember, the stock price doesn’t reflect the actual value of the company. We know that the company’s price will bounce back in time, and because we take a long-term approach to investing in stocks, we aren’t worried. During an event, when others are panicking, we can take advantage of the downturn and buy wonderful companies at a tremendous discount. In this vault episode, Phil and Danielle discuss why as a Rule #1 investor, it’s critical to take advantage when stocks go on sale. Learn how to prepare for the next Rule #1 event with Phil’s Ultimate Stock Market Crash Survival Guide: https://bit.ly/2UuIhGS Learn more about your ad choices. Visit megaphone.fm/adchoices