How To Invest

In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.

[text_ad]

Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.

If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)

If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.

[text_ad]

Read More Close
How To Invest Library Archives
A: Enghouse Systems, $65.08, symbol ENGH on Toronto (Shares outstanding: 27.1 million; Market cap: $1.8 billion; www.enghouse.com), is a software and services provider.

The company operates through two business groups: Interaction Management (59% of total revenue) sells software for managing customer interactions; and Asset Management (41% of revenue) offers technology solutions for network operators and software solutions for transit and transportation operators.

Over the past five years, revenue for Enghouse Systems rose steadily from $179.9 million in 2013 (fiscal years ended October 31) to $325.4 million in 2017.

Earnings jumped 21.9%, from $24.3 million in 2013 ($0.94 per share) to $29.7 million ($1.14) for 2014....
International Flavors & Fragrances, $124.97, symbol IFF on New York (Shares outstanding: 78.9 million; Market cap: $9.9 billion; www.iff.com), makes over 46,000 compounds that improve the taste of food and the smell of consumer products.

In 2017, the company’s Fragrances business accounted for 52% of its overall sales....
A: Detour Gold Corp., $10.47, symbol DGC on Toronto (Shares outstanding: 174.9 million; Market cap: $1.9 billion; www.detourgold.com), finished building its Detour Lake mine in northeastern Ontario in February 2013....
A: Nemaska Lithium, $1.25 symbol NMX on Toronto (Shares outstanding: 312.8 million; Market cap: $514.6 million; www.nemaskalithium.com), is moving steadily to start up its Whabouchi lithium project in Quebec.

Lithium is used in household batteries, glass and ceramics, lubricants, refrigeration, pharmaceuticals, polymers and aluminum production....
When I talk to serious, successful investors, few ask, “Do you think the central banks will raise rates two or three times by a quarter-point before the end of the year?” or “Do you think inflation will hit 3% in the next year?” They are more likely to ask things like, “What are the chances that interest rates and/or inflation will get back up to the peaks of the 1970s/1980s?”

That is a much more important question. A quarter-point change in interest rates or inflation is a fluctuation....
A: Open Text, $47.10, symbol OTEX on Toronto (Shares outstanding: 263.1 million; Market cap: $12.5 billion; www.opentext.com), develops, markets, licenses and supports collaboration and enterprise-information-management software for corporate clients....
A: Whitecap Resources, $9.20, symbol WCP on Toronto (Shares outstanding: 367.6 million; Market cap: $3.8 billion; www.wcap.ca), produces and explores for oil and natural gas in Western Canada....
Here’s the text of the most-recent letter I sent to our Portfolio Management clients in late April:

“To succeed as an investor, you need to focus on basic principles, and downplay or ignore trivia. Basic principles provide the fuel for market booms that go on for many years, if not decades....
A: Artificial intelligence is essentially the merging of today’s big computing with big data.

The highest form of AI, known as “deep learning,” involves loading a powerful computer system with millions of pieces of labelled information and waiting for it to categorize and sort data then make connections....