Taking Charge with Value Investing: How to Choose the Best Investments According to Price, Performance, and Valuation to Build a Winning Portfolio by Brian Nichols

PART I

CHAPTER 1
Get Prepared
Wall Street is the only place that people ride to in a Rolls Royce to get
advice from those who take the subway.
—WARREN BUFFETT
If you were to ever decide to handle your own finances, you would find that
it just may be the most overly emotional period of your life. Well, hopefully
not the most emotional, but no doubt, it would definitely rank in the top
five. I use the term overly emotional because there is simply not one single
emotion that can accurately describe how someone may feel when he makes
a life-changing decision as such. There are a number of different ways you
may feel; you may feel joyous, excited, or anxious or possibly scared,
fearful, or nervous. Either way, emotions run high because it is one of the
most important decisions of your life. It is a decision that very few people
actually entertain but something that everyone is capable of doing.
Your emotions will depend on a variety of factors, such as age, financial
status, career, children, and so on. A 45-year-old man may view his
investments much more differently than a 25-year-old man and is most
likely not willing to take the same risks. The factors of age, income, and
individual responsibilities will determine your thought process and come
together to create the volatility of the financial markets.
The stock market is nothing more than a collection of individual people
with various goals that all come together yet react in different ways. This
would explain why the market acts without reason and why there is no 100
percent proven way to effectively ensure that you “beat” the market 100
percent of the time. Our market acts without reason because it is a place

Taking Charge with Value Investing: How to Choose the Best Investments According to Price, Performance, and Valuation to Build a Winning Portfolio by Brian Nichols