Stocks Intermediate: 20 Stock-Investing Tips

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1.
The stock of a company that is in great shape financially will always be priced accurately.
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False. Though that is the ideal, a stocks price is sometimes higher or lower than what is accurate (that is, what its book value is).
2.
All else equal, you should be most interested in buying _______.
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A wide-moat company with mediocre management. Remember, the economics of a business usually trumps the competence of management.
3.
When owning a stock, you should evaluate its price relative to the price you paid for it.
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False. The price you paid for it isnt very relevant. What is relevant for evaluating a stocks price is the estimated value of future cash flows.
4.
If a company you are investing in reports a nice big surprise, what can you expect?
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There will be more surprises. Its not a sure thing, but you can expect more surprises, as there is likely to be a trend going on.
5.
Which of the following should you tune out?
Choose wisely. There is only one correct answer.
A prediction on television about where the market will be next year. You should tune out the noise, which includes short-term predictions made by others concerning things that cant be predicted.