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Do You Know What’s Important & Knowable?

Do You Know What's Important & Knowable? by Investor Vantage

"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain't so."

Mark Twain

When it comes to the stock market and investing, there are several tips and tricks that experts can express to new investors, but by far one of the most important pieces of strategic advice is to focus on what is important and knowable. There will never be a chart that tells you which investments will pay off and which won’t, which means that every investment has a level of risk associated with it. Choosing ingredients that are important and knowable might not bring you guaranteed success every time, but it certainly offers less risk and more simplicity than those which cannot be known or understood…

Not Everything That Can Be Counted Counts

One of the world’s best-known investors, Warren Buffett, has recently explained that most investors make a key mistake in their investment strategy. This mistake is that they put the emphasis on what they can know, but not enough on whether or not it is important. There are plenty of things that we know, but many of these issues really aren’t important. We know that the sun will come up tomorrow, but we cannot influence it and it doesn’t have an effect on how to invest either. So, although we know it, is it important?

When you invest in the stock market, you need to think about the things that are most important, rather than on what will happen and when. You need to learn things about the specific company that you are following on the stock market. A company that is doing well financially, that has a popular product and that has an excellent management structure is a company that you should look at investing in. If a business has created sustainable competitive advantages which produces tons of free cash flow, has readily...