Take Advantage

"And the best plan is, as the popular saying was, to profit by the folly of others." - Pliny the Elder

This statement shows that the best way to make money and profit is from other people's mistakes. Companies that succeed do this task extremely well knowing, finding the flaws in competitors and digging right into that weak spot. As an investor, you need to do this as well. Finding undervalued stocks is a key to long term profits. I try to stay away from companies that are highly favored in the market because they cannot always beat expectations or could quickly lose their spotlight. High focus and favor from investors also probably makes it overvalued because everyone wants shares and creates a bubble. Undervalued stocks are far away from a bubble and have room to move up in price.

Besides looking at undervalued stocks as other investors folly we can look at companies and parse through information to find the best firms that take this advice to heart. CEOs and management should be talking about their competition and how they are performing and fighting the competition at some point. Firms that never mention the competition might not realize the problems that could appear or not care about taking advantage of other competitors which is a warning signal for sure. Firms that take competition seriously are better choices for long-haul investments. They will take concerns seriously and want to be the best in the sector.

Take this proverb as advice in how to invest and also to compare companies. The best are looking for ways to crush rivals. They are also making sure that they have good defenses against advisories. Remember to keep thinking and studying investments.