The ball is sacred! (The Financial Athlete, #3)

To urge his students to focus on the ball and hustle to get to it, my tennis instructor says, “The ball is sacred!”

In the investing the world, there’s also a ‘ball’ to keep your eyes on. A lot of investors don’t know where to look to find the ball. Many turn to others with stock tips, thinking they must know. Often they don’t know either but won’t admit it…’the blind leading the blind’.

Cash flow is the sacred ball. Read and understand the Cash Flow Statement to come to a realistic viewpoint of the lifeblood of the company or rental real estate.

A good tennis player studies the ball in relation to the opponent’s stroke and from where he hits the ball, and the force and direction of the wind. For stocks, cash flow must be studied in relation to the Balance Sheet, revenue and earnings, growth rates, the business model, outstanding number of shares, and the economy’s impact on the industry.

“Risk comes from not knowing what you are doing.”
–Warren Buffett

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