Three Investing Patterns That You Should Know

One of the most important realizations I&#x27;ve had recently is the investing motto: &quot;You can&#x27;t beat the market, but you can beat the tax man&quot;.<p>Don&#x27;t try to be smart about your investments from the point of view of share pricing, P&#x2F;E ratios, EBITDA, etc, etc. The legions of Harvard and MIT quants working on Wall Street are going to be better than you at figuring out what the stock price should be.<p>Instead, get smart about how the tax code works. Figure out the difference between long-term and short-term capital gains. Figure out how to do tax loss harvesting. Figure out what a back-door IRA is. Figure out how to take out a loan on your 401(k). The benefits from those investigations are going to be much more reliably beneficial than trying to be smart about pricing and timing the market.

When economists say &quot;_net present value_ of future returns&quot;, are they exclusively wanting to discount the inflation effects? Or is there anything else?

TLDR<p>Cyclical and company-specific problems: This pattern involves a temporary issue that depresses a company&#x27;s profitability. Cyclical issues are industry-wide downturns that eventually rebound. Company-specific issues require effective management to identify and resolve the issue. These problems offer opportunities to investors who can identify them early and wait for the recovery.<p>Turnaround situations: These represent company-specific problems that management is actively working to solve. Investing in these can be risky, as not all turnarounds are successful, but when the key operating metrics begin to improve and the turnaround shows signs of success, it can be a good opportunity to invest.<p>Moderate and prolonged growth: This involves companies that consistently demonstrate moderately above-average growth rates (6% to 12%) over a long duration. This steady, long-term growth is often underappreciated by the market, providing a potential opportunity for investors.