To recap: I got in a battle with a guy from Kiplinger on Maria Bartiromo’s show, Closing Bell. He said that individual investors can only succeed if they diversify (easily done with mutual funds) and hold through the drops in the market because the little guy can’t pick wonderful businesses that are on sale, nor know when to get out. Maria was also skeptical that the little guy could successfully use technical tools to get in and out when the Big Guys get in and out. Let’s see if we can convince our doubters, shall we?
The first step of knowing when to buy and when to sell is to know the business that you are buying well enough to be able to put a value on it. It is absolutely basic to Rule #1 investing that the business is wonderful.
Wonderful businesses are easily found, but you do have to know what "wonderful" looks like. I could write a book about it. Oh, wait. I did write a book about it. So read it. But I’ll cover the main points here for you anyway. I call the main points "The Four M’s”, the first 3 of which are all about "wonderfulness".