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Philip,

That was a great explanation. Thanks! However you brought up several other aspects of investing that I am wrestling with now. I recently joined HG and as we say in the military, the learning curve has gone vertical. I have been scouring Fool articles on how to value stocks, printed articles to study, created work sheets I can use to try my hand at DD etc. However, I am finding that when I work the numbers I, 1) I am not sure that I understand what they are always telling me. 2) That I understand the numbers well enough to set a "value" of what I think the stock should be. I read the HG boards and track the DD work of the other members and I have noticed that many members use different parameters in their DD work, which I find many times more confusing than enlightening. Another aspect you bring up is your margin of safety. I am not sure what my margin should be. The last aspect is you say you check the performance of your picks every quarter. I am finding that, 1) No two companies quarters end in the same month. 2) Doing a quarterly reviews are very time consuming. I am not saying that I don't want to invest the time. I am saying that my lack of knowledge prevents me from being able to do this in a timely manner, which brings us back to my first two points. I have been trying to “chart a course” thru the Fool labyrinth of knowledge but I must say that I loose my way more times than not. I have invested in mutual funds for years and have always wanted to learn about individual security investing. I understand that most mutual funds can't out-perform the market. I have a few of these funds myself and I am convinced that I can do better with the right stocks. Any suggestions on how I should proceed.

Thanks,
Keith
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