Choose wisely. There is only one correct answer to each question.
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1.
If you are going to succeed at holding a concentrated portfolio of stocks (say, fewer than 20), then your stocks should be held _______.
At least 3 years. It may take this long (or longer) for the market to recognize the value of a company.
2.
Companies with wide economic moats tend to have _______.
Long-term staying power. Their competitive advantages help to ensure that they will survive for a long time.
3.
Is it a detriment to fat-pitch investors to hold cash when the market is rising?
No. It may be difficult to patiently sit on cash when the stock market is rising and you feel as if you're missing out on the fun. However, holding cash is akin to holding an option for when the market provides opportunities to buy at lower prices.
4.
When following a fat-pitch strategy, why would you not want to trade very often?
The odds are that the stock's underlying value will continue increasing. Why sell a stock when it keeps rising year after year?
5.
The fat-pitch approach to stock investing is best described as _______.
Buying above-average companies at below-average prices. The fat-pitch approach is best described as buying above-average (wide-moat) companies at prices that provide a margin of safety to your fair value estimate.
