Being a successful investor means something different for each individual. Some investors aim to outperform the market. Others aim to generate enough income for their needs. Investors can learn a thing or two from the management at Brookfield Property Partners LP (TSX:BPY.UN)(NYSE:BPY).
Do things differently from others
If you follow the herd, you won’t beat the market. Think about it. You’ll be buying stocks as the market bids up their share prices, or you’ll be selling when the market drops like a rock.
A simple example of doing things differently would be buying when seemingly no others would. If you buy on the dip after doing your due diligence and believe in the long-term durability of the corresponding business, you may be on the path to outperform for that stock investment.
Recently, Brookfield Property proposed to buy out GGP, as GGP has been trading at a discount we haven’t seen in years. This is an act of doing something different. Most other investors are staying away from retail real estate investment trusts (REITs) right now, but that’s when the REITs are cheap.
It’s uncommon to find quality businesses at truly discounted prices. Brookfield Property was patient enough to wait until recently to make the buyout proposal. If Brookfield Property were to buy GGP any other time in the last few years, it would have needed to offer a much higher price.
While the market has obviously chosen to abandon Enbridge (at least for now), as the stock had fallen 24% from peak to trough in the last year, and while some talking heads have been saying that Enbridge could fall further from the $44 per share level, I decided to buy to lock in that 5.5% yield.
So far, the stock has bounced nearly 7% from ~$44 in a matter of three days. Can the stock fall from the current level of ~$47? Sure, it can. If it does fall further, I’ll reanalyze the situation to decide if I should continue to hold or even add more. Enbridge is a long-term holding for growing income. So, it only makes sense for me to buy more shares when I find the shares to be trading at a good value.
Have the will to learn, apply, and improve
Reading, learning, and applying investing is a must. Over time, you’ll develop your own unique way of investing and your own philosophy. The most important thing is to tweak and improve that strategy over time.
Remember that no investment will outperform all the time. When certain investments are underperforming, assess the situation, and go back to your notes to remind yourself why you bought in the first place to determine if you should buy, hold, or sell.