A plumber was called to fix a pipe. After completing the task, he turned to the house-owner and said, “That’ll be a hundred rupees.”
“What?” the owner replied, “A hundred rupees for just banging on the pipe? That’s too much!”
“Banging on the pipe is only five rupees, sir. Knowing where to bang – that’s ninety-five.”
Well, in stock market investing, knowing where to ‘bang’ – finding the right stocks to invest – is the secret to your fortune.
And to know where to bang, you must have the right skills…in this case, the ability to identify the right kind of businesses.
Believe me, this – the ability to identify the right kind of businesses – isn’t any black magic as you’ve been made to believe all these years.
You don’t need to gaze into the future. You don’t need to make any predictions for the future of stock prices.
You don’t need to ask questions like:
- “Is this stocks going to be the next Infosys?” or
- “Is Infosys going to skyrocket in value?”
While it would be nice and perhaps more profitable to be able to predict those types of future developments, few people can combine the knowledge, ability, and timing to predict and profit consistently from future events.
Whether you can or cannot predict the future is beside the point. You don’t have to.
What you need to know is how to profit from studying the present day businesses and then making your stock selection.
You need to have the skills to identify the good businesses from the thousands that are listed on the stock exchanges.
But how do you know which businesses are good?
For that, you have “Value Investing for Smart People”, my 20-lesson course that teaches the simple secrets to identify the good businesses that will ultimately help you become a smarter and successful investor.
Anyways, as a smart and sensible investor, the big idea is that you must try to seek out businesses that will give you joy to own and live with for the next 10-20 years.
The trick is locating those opportunities from the heap of junk (stocks) out there.
The trick is in knowing where to bang.
As Warren Buffett says so often, “If a business does well, the stock eventually follows.”
So, if you know where to bang, your returns are guaranteed. Just ask the plumber!