The Cure To His Own Curiosity
Long Term Stock Investment Strategy
I’ve been planning to come up with this post for quite some.
It serves as my personal check list, so that I won’t miss out anything when I do my company stock evaluation.
Most of the Long Term Investing approach focus closely on fundamental analysis, and I’m no different here.
Most of the stuff here I believe, you’ve seen it somewhere. It’s definitely not from me. I’m just reiterating it here, so that it reminds me and serves as written guideline to me.
| 1. | Avoid Price Competitive Industry (link) |
| Do not invest in industries which doesn’t have any edge, whereby price is the only sole factor that wins the customers. | |
| 2. | Economic Moat (link) |
| Does this company have any sort of business edge compared to its competitors from the same sectors? | |
| 3. | Growth (link) |
| Is this company growing consistently for the past 10 years or so? | |
| 4. | Profitability (link) |
| Is this company’s profitability metrix improving, or at least, staying at good ratio consistently? | |
| 5. | Financial Health (link) |
| How’s the financial health of the company? Can it pay back it’s debt and yearly interest on time? | |
| 6. | Compare with Competitor (link) |
| Compare this company with its direct competitors. How does it fare compared to its peers? | |
| 7. | Calculate Intrinsic Value Using Discounted Cash Flow (link) or Discounted EPS (link) |
| Once everything is in place, it does not mean that we’ll jump into the stock straight away. We only want to buy it when the stock price is selling at a discounted price to it’s intrinsic value. |
This 7 steps pretty much sums up the process that I use to go through while doing my evaluation on a company’s stock.
- My Long Term Investing Summary/Watchlist & Other Company’s Analysis (link)
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tag : invest, stock, market, warren, buffett, value, growth, long, term, fundamental, analysis
| This entry was posted by lionel on February 7, 2010 at 5:25 pm, and is filed under Investing. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site. |
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