After studying Warren Buffett, Charlie Munger, George Soros, John Paulson and David Tepper, I decided on about a dozen filters and formulas which help me enter low-risk, high-reward common stocks near or around their 52-week lows.
My selection process combines growth, safety, and income spiced with a slight dosage of leverage.
Don’t want to use any leverage? Your returns will still exceed double digits if you can get the proper entry points.
What’s ironic is people think it’s totally normal to borrow money to buy a depreciating asset like an automobile but that it’s somehow risky to pay 4 percent interest to buy a stock with a 7 percent dividend.
Warren Buffett's Obscure Strategy to ‘Retirement Prosperity’ — Click Here
Many market gurus will try and predict what’s going to happen in 2011 to the overall market. I don’t know and neither do they. What I do know is that many quality stocks will, at some point, reach the proper entry point.
Recently, some pundit asked: "Why would one individual think they know more than these millions of people all over the world whose opinions have already been aggregated in that price?"
"What information do you know — or some investor know — that is not already baked in the cake?"
Maybe John Paulson and Warren Buffett, who have made almost a quarter of a trillion dollars investing, should somehow give back their fortune?
The fact is some folks can play the piano or shoot a basketball better than other folks. Why should picking stocks be any different?
In January 2008, the S&P was higher than it is today. Many who own index funds are still trying to get even. My personal portfolio is up more than 95 percent in the same time frame.
If you can build a Dividend Machine whose annual dividends will more than pay all your living expenses before you retire, then you have reached financial independence.
Stay focused and your dreams could come true.
I know it’s possible because it happened to me.
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About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here
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