• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • HOME
  • ABOUT

The Fortunate Investor

Investing, Business, Saving, Debt, Money, Retirement, Taxes and Family Finances

  • Business
  • Invest Your Money
  • Save Money
  • Get Out of Debt
  • Make Money
  • Family & Money
  • Taxes
  • Retirement
    • Retirement Calculator
You are here: Home / Investing / When Assets Go On Sale, Buy, Buy, Buy

When Assets Go On Sale, Buy, Buy, Buy

November 28, 2020 By Bobby | This article may contain affiliate links. For more information visit our Disclosure

Tweet
Share
Pin
Share
Share

When Assets Go On Sale, Buy, Buy, BuyHave you ever wondered why some investors got so wealthy? Their secret is simple. They buy assets at massive discounts and then wait for the price to appreciate. 

The market is a fickle thing. Sometimes it will consider a capital item as being extremely valuable. And other times, it’ll discount their worth massively. The strange thing is that you never know which way things are going to go. 

Just look at what happened during the crash of 2020. The Dow Industrial Average fell by more than 40 percent. But now it is back above its all-time highs. Investors got the pricing of assets wrong temporarily; it seems. And now we’re in a situation where a lot of people lost money for no reason. 

Warren Buffett believes in buying assets when the price is low. That’s how he created his Berkshire Hathaway Empire. He realized that there was a difference in real and perceived value. Sometimes the market will undervalue stocks of companies that stand a very good chance of becoming highly profitable in the future. And sometimes it will over-value them. 

Buffett was able to identify this pattern and then use it to his advantage over the long-run. He looked for assets in the market that were “on-sale” and identified them before everyone else. Then he just let the value of his equities rise over time. He managed to average returns in the 20 percent range over the course of decades, which is an incredible achievement. 

What Assets Should You Buy?

How do you know, though, whether an asset is on sale? That can be more challenging. 

Look For Signs Of Distress

The first thing you can do is look for signs of distress. Sometimes, people put their properties on sale because they’re trying to repay a debt or recoup losses elsewhere. In many cases, they are willing to sell at a lower price because they need cash right now. There is urgency. 

For those reasons, you need to know the facts about the asset before you make the purchase. If a homeowner is trying to sell their property because they are in mortgage arrears, that can be a great time to buy. The same applies to a distressed company. Sometimes, you’ll find firms that are doing poorly financially but have a great product that will ultimately win in the long-run. It’s just a question of finding them. 

Look For A Good Balance Sheet

Sometimes, you’ll want to go in the opposite direction and look for undervalued companies with excellent balance sheets. You can often find well-run but uninspiring companies that investors largely ignore. Remember, a lot of people are buying Tesla and Apple stock purely because they find those companies exciting. But that doesn’t mean that the value they contain is real and long-term. Problems in their balance sheets could deny them the opportunity to become profitable.

Look for companies that have low debt compared to their share price. These often have more room to run in terms of equity prices.

Primary Sidebar

Popular Articles

Real Estate Tycoon: 5 Must-Know Tips for Investing In Commercial Real Estate

Making Your Mark in Real Estate: Factors to Kickstart Your Investment Journey

Investing in real estate is like planting a seed that can grow into a sturdy oak tree over time. … Read More about Making Your Mark in Real Estate: Factors to Kickstart Your Investment Journey

Struggling to Grow Your Business Here Are 6 Simple SEO Tips for Your Small Business

Money-Savvy Tips To Drive Innovation For Your Small Business

Any successful small business relies on innovation. It can drive the organization forward, allowing … Read More about Money-Savvy Tips To Drive Innovation For Your Small Business

How To Make Sure You’re Compliant In Business

How To Make Sure You’re Compliant In Business

When you run a business, you’ll have a lot of rules and regulations to stick to, and sticking to … Read More about How To Make Sure You’re Compliant In Business

Tips for Dealing with Conflict in the Workplace: What You Need to Know

No one expects to be best friends with all of their coworkers, but at the same time, not getting … Read More about Tips for Dealing with Conflict in the Workplace: What You Need to Know

Final Checks To Carry Out Before A Safety Audit

Final Checks To Carry Out Before A Safety Audit

Keeping the people in your business safe and sound is one of the primary responsibilities you have … Read More about Final Checks To Carry Out Before A Safety Audit

Footer

TOPICS

SAVE MONEY
INVEST MONEY
REDUCE DEBT
MAKE MONEY
FAMILY & MONEY
TAXES
START A BUSINESS
RETIREMENT

THE FORTUNATE INVESTOR

ABOUT US
ADVERTISE
CONTACT US

The Fortunate Investor focuses on personal finance topics to build wealth. Topics include saving money, investing, managing debt, family and money, taxes, making money, college planning, starting a business, coupons and retirement.

SOCIAL MEDIA

FACEBOOK
TWITTER
PINTEREST
YOUTUBE

Copyright © 2023 Fortunate Investor. All Rights Reserved. | Disclaimer & Disclosure | Privacy Policy | Terms of Service