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1.
Fat-pitch strategy argues that you should be comfortable holding cash instead of being invested in stocks when the market is already rising.
True. Fat-pitch strategy argues that it is an advantage to forego buying strong companies when their prices are rising and instead wait with your cash in hand for when their stock prices dip.
2.
When following a fat-pitch strategy, why would you not want to trade very often?
The odds are that the stock's underlying value will continue increasing. Why sell a stock when it keeps rising year after year?
3.
If you want to succeed with a concentrated portfolio of stocks (say, fewer than 20), you should _______.
All of the above. A concentrated portfolio will generally only work if you do all three of these things.
4.
The fat-pitch approach to stock investing is best described as _______.
Buying above-average companies at below-average prices. The fat-pitch approach is best described as buying above-average (wide-moat) companies at prices that provide a margin of safety to your fair value estimate.
5.
Companies with wide economic moats tend to have _______.
Long-term staying power. Their competitive advantages help to ensure that they will survive for a long time.
