Peter Lynch, the Fidelity investing guru, once said:
“When stocks are attractive, you buy them. Sure, they can go lower—I’ve bought stocks at $12 that went to $2, but then they went to $30.”
With this in mind, never invest in a company without understanding its finances.
The biggest losses in stocks come from companies with poor balance sheets.
Always look at the balance sheet to see if a company is solvent before you risk your money on it.
Understand how a company makes its revenue and maintains its cash flow.
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