Stock Investing Basics

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Key Words from this lesson: Fundamentals, Market Price, Earnings, Bookvalue, Patience, Price to Earnings ratio, Price to Bookvalue ratio.

Key Points from this lesson: 
4 Rules when looking to buy a business:
- pick a stable, understanable business.
- pick a business with long term prospect/ enduring economic characteristics.
- pick a business with good managers that can also handle debt well.
- only buy a business if it's at a good/ reasonable price compared to it's intrinsic value.

 Other points:
- think for yourself. don't follow because "others are doing it".
- typically a reasonable PE should be less than 15.
- typically a reasonable PB should be less than 1.5.





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