‘Successful investing requires structured decision-making based on a well-built process’
Hungarian author David Solyomi is also an investor, entrepreneur, and instructor on dividend investing on various e-learning platforms. As investing is his passion, he surrendered all his executive roles at the age of 33 and became a full-time investor. He established and sold his first company by the age of 24 and more of the same “building and selling” processes followed afterward. THE FALCON METHOD is his debut in publishing.
David’s writing style invites the reader into the territory that for many of us is threatening. In his Preface he states, ‘What Makes a Good Company and a Good Investment? The value of an investment is determined by the amount of cash it can pay you, the timing and probability of these payments, and the prevailing risk-free interest rate. If this sounds complex, it’s not, really: let me show you how sensible investing can be simple and rewarding at the same time. History shows us that stocks provide the best returns in the long run. Since stocks are not lottery tickets but rather represent ownership stakes in real companies, there are just two questions a successful investor must be able to answer: What makes a good company? A firm that produces more cash than it consumes and only needs to retain a fraction of this surplus cash to maintain the standard of its operations and its competitiveness can be a promising candidate for investment. The key is having this “no-strings-attached cash,” which can either serve as the source of further growth or can be returned to the owners… a good company excels in the operations and capital allocation dimensions. But these alone will not make it a good investment, since the company will give you subpar returns if you overpay for the shares. This is where the third key dimension, valuation, comes into play. You need to buy stocks of quality companies when they are available on the cheap—that’s the recipe for stock market success and wealth building. As obvious as it sounds, this has been proven to work for centuries, as we will soon see.’
David explains the Falcon Method – ‘it’s all about buy and hold’ – in a manner that is easily absorbed and accessible even to new investors. It may take several readings to absorb all of the rich information here, but with David’s distinct manner of tutelage accompanied by additive illustrations, even the novice can learn and appreciate and grow. Highly recommended.