Friday, July 23, 2010

Critical Stock Criteria:

This is a quick & dirty list of the most important things to look for when researching companies or stocks to invest. Keep in mind that this is not a complete list nor does the company or stock have to pass every single point. Although, we would recommend that the majority of points be reached; however, each case, must be weighed individually.

• Possess an Economic Mote

• Consistent EPS for past ten years (if applicable)

• Free Cash Flow

• Low Debt Ratio

• Brand Power

• Compare stock & company to the competition

• A Discounted share price/Margin of Safety

• Revenues

• Return on Equity

• Consistent Dividends (Recommended for a long term play, not necessary for short plays)

 General Practices:

• Always use a Stop-loss for short plays

• Minimize all expenses, fees, commissions, and taxes

• Read stock reports & news daily

• Do not use margin or acquire debt

• Be wary of trends

Remember K.I.S.S. Keep It Simple Stupid. All of these hair-brained ideas, systems or theories of technical analysis/charting are a total waste of time. Simply, pick great companies at a discounted share price. Presto; you win.

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