RL156 — The Art of Long-Term Investing: Tips for Identifying Stocks to Hold Forever
On the Retirement Lifestyle Show, Roshan Loungani, Erik Olson, and Adrian Nicholson go through tips on researching stocks you can hold for the indefinite future. They break down Roshan's approach for researching, screening, and picking stocks for long-term investments and the amount of time it takes to identify such stocks.
[00:00] Introduction
[02:33] Screening and the First Step to Picking a Stock
[05:26] Why Roshan Screens for Companies With a Billion Dollar Valuation
[09:46] Sorting and Choosing the Type of Screens to Work with
[12:50] Time Spent Versus Time Wasted Researching a Company
[17:28] Getting Too Attached To a Stock
[26:03] Researching Companies with Profitable Growth
[28:00] Figuring Out Where to Spend Most of Your Time
[31:03] Number of Companies to Start with When Researching Where to Invest
[34:27] Rules For Research and Sorting
[38:10] Roshan's Approach Compared to Buffett's Approach
[41:32] Valuation Measures and Deciding Which Companies to Sell
[44:31] Good Investors Learn From Other Good Investors
[47:23] How to Make Efficient Use of Your Time When Investing
[54:30] Reviews and Benefits of Having an Investment Checklist
[58:53] How to Replace a Stock After Finding Something Better
[01:02:12] Parting Thoughts
For more links and the full show notes keep scrolling down!
Roshan Loungani can be reached at roshan.loungani@aretewealth.com or at 202-536-4468.
Erik Olson can be reached at erik.olson@aretewealth.com or 815-940-4652.
Adrian Nicholson can be reached at adrian.nicholson@aretewealth.com or at 703-915-8905.
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Full Show Notes:
Tips For Identifying Stocks to Hold Forever
How do you go about researching stocks you can hold for the indefinite future? The type of stocks whose companies are strong, profitable, and clear about their business model that, barring some dramatic turn of events, you can feel great about owning them for the long haul. Ideally, you should be looking for companies that are growing so much and, in theory, should keep growing. The flip side is that you also want to buy them at a good price, which makes it tough.
So if you find a stock with consistent growth over ten years at a good price, you should keep it. However, not all stocks are created equal, and identifying the right stocks to hold forever can be challenging. It requires thorough research and a lot of due diligence. By considering the company's competitive advantage, financial health, leadership team, and industry trends, you as an investor can make informed decisions and build a long-term portfolio of profitable stocks.
Getting Too Attached to a Particular Stock
We already know that it's never a good idea to be emotionally attached to a stock. But that is easier said than done. Maybe you've held onto the stock for a long time or love their growth story; whatever the reason, stubbornly hanging on to a stock that is not furthering your financial goals is never a good idea. This is because your attachment to the stock can cloud your judgement and cause you to lose opportunities or money. Of course, it's impossible to take emotions completely out of your investment strategy, but always follow the data. Have a strict laid-down investing system that minimizes the emotional component of your investing. Even if you plan to keep a stock long-term, if the right opportunities arise, no matter how attached you are to the stock, always consider making the trade.
Links and Resources:
Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage by Mary Buffett
All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.