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1.
If you want to succeed with a concentrated portfolio of stocks (say, fewer than 20), you should _______.
Choose wisely. There is only one correct answer.
All of the above. A concentrated portfolio will generally only work if you do all three of these things.
2.
When following a fat-pitch strategy, why would you not want to trade very often?
Choose wisely. There is only one correct answer.
The odds are that the stock's underlying value will continue increasing. Why sell a stock when it keeps rising year after year?
3.
The fat-pitch approach to stock investing is best described as _______.
Choose wisely. There is only one correct answer.
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.
4.
According to fat-pitch strategy, the purpose of holding cash instead of being invested in stocks is that you are _______.
Choose wisely. There is only one correct answer.
Waiting for the stock prices of strong companies to drop. According to fat-pitch theory, fat-pitch investments are likely to provide strong growth and absolute returns over time. Thus, you can afford to wait until the prices dip.
5.
"Fat pitch" companies normally have _______.
Choose wisely. There is only one correct answer.
All of the above. Looking for these characteristics will help you identify fat-pitch opportunities.