Buying on dips or averaging down is relatively easy for quality stocks. I found a link explaining in greater detail. Generally stocks rise over time, but if bought on corrections , then can add that extra alpha.
I do not have a document for this or a very structured method but to me there are five risks which I know of and one risk of the unknown.
The topmost risk to be managed is - Management Integrity Risk. This to me is the most important. While I do not consider any management to be fully ethical (Infosys comes very close), I want to invest my money with managements which will not skim me from time to time. I do not like managements which have a lot of subsidiaries owned by related parties. I do …
I agree with your approach.
Macro risks are too difficult to tame. I have tested various technical indicators for the same, but no simple strategy gives an edge in present day markets, so I have given up this quest for now and decided to bear it.
Now if a company has no management integrity or competence risks, and the business has sustainable competitive advantage with long growth runway, and if in addition it is available at reasonable valuations, it will be a perfect investment opportunity.…
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