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Hey Guys welcome to module 2 and this module will talk about some value investing principles.

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You don't have to be a legend to generate market beating returns with a value investing strategy.

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But if you want to understand how to be a successful value investor it will help to keep these principles

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in mind.

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OK the first point you need to acknowledge is that value investing is not gambling and you should approach

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it with a full understanding of exactly what type of investor you are.

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And most importantly you must understand exactly what you buy and why you buy it knowing the what and

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the why here is very important.

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You know value investing isn't a passive strategy.

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Far from being a guessing game or a gamble value investing is work when evaluating a company.

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You should be able to answer the following questions and explain everything in your own words.

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What is the company you're investing in do.

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How does it make money.

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What are its competitors what are the potential risks that it may take.

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And why do you expect its stock price to rise over time.

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It's important to know these things when you first invest.

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Of course but it's just as important to stay up to date on major developments affecting the company

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so that you can continue to answer those questions accurately at a minimum.

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You should read the company's quarter reports and keep at least a half lie on news pertaining to the

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company so that you understand if its situation is changing.

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If something happens that lowers its intrinsic value you'll need to re-evaluate it.

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Do you still have a good reason don't the stock if the company you own takes a turn for the worse with

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no likely recovery on the horizon selling stock may be the best option even if it means taking a loss

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when it comes to investing.

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Minimizing your risks is important and that should be your first priority.

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So that's principle number one.

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Understand what you buy and why you buy it.

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See you in the next video.