I have been investing since 2008. My stock philosophy is pretty simple and is explained in the four points below:
I generally look for companies with the following characteristics: 1) Long term economic benefits 2) The company's stock is deeply undervalued 3) The company's management and information is clear and there is goal congruence 4) Understanding of the company's business.
All four of these points are important. If the business does not have long term economic benefits, then I am not interested because as a minority shareholder I cannot control decisions such as a break-up of a company. Time is the friend of the wonderful business and the enemy of the mediocre one. Those businesses without long term economic benefits will lose value every day they are not broken apart. Second, I only invest in securities that are deeply undervalued. This is because a stock's valuation is inherently imprecise and small changes in variables can cause large distortions in value. Therefore I do not buy securities I believe are 1% undervalued. Thirdly, I like a company's management to have similar values to myself. I disdain investing in companies with dual class shares that give management 10 votes to my 1 in making company decisions. While management with these characteristics may be very successful, they lack goal congruence with their shareholders. Management would want dual class shares as it ensures they have a job tomorrow because shareholders do not have a say. However this does not make sense. If you own 1% of the company you should have 1% of the vote, not 0.1%. Management that does this can keep their votes but I will keep my money. Lastly I need to understand the business. This means I know how the company makes its money and what affects its results (understanding the accounting, reading the annual reports, understanding the qualitative future of the business). The strategy is perhaps not as fun as day trading but until someone can name me a long-term successful day trader then I will continue to follow my strategy.