5 Stock Filters Value Investors Like Warren Buffett Use All the Time

Does the current stock price provide a margin of safety?

Even the world’s best stock could be a bad investment if purchased at too high a price. Chances are it will not produce the kind of long term returns for the investor because that entry price was too high. A good stock bought at a reasonable price will create a margin of safety in case the company goes through a rough phase.

In good times, that stock can produce outstanding returns. This filter must be used cautiously because buying a bad stock at a low price will most likely turn out to be a bad investment no matter what. The fifth filter must be used only when the previous four filters are diligently applied.

Small-cap winners galore

The big stock market winners share one common attribute: Near the beginning of the ascent of their shares, the companies offer revolutionary products or services, are market leaders in their respective industries, or both. Some big stock market winners that possessed the attributes outlined above are Netflix (NFLX), which we recommended to investors in October 2002; Intuitive Surgical (ISRG), which we bought and recommended in July 2004; Baidu.com (BIDU), which we bought and recommended in August 2006; and MercadoLibre (MELI), which we recommended to investors in October 2010. Get up-to-date small-cap stock picks from David Frazier, editor of Small-Cap Profit Confidential.
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Smarter cryptocurrency investments

The stock market crash of 2008 was the catalyst for his journey into alternatives. And interestingly, it was the impetus behind the creation of Bitcoin and the blockchain technology behind it. Keene Little wasn’t ready to risk his money yet but he was very curious, so he began charting Bitcoin’s technical patterns. What finally convinced him to dip a toe into digital currencies was seeing that they followed familiar price patterns that could be analyzed and successfully acted on. Now he shares those insights with subscribers to the Crypto Wealth Protocol.
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