I have been into investing for a while. I have an adviser for my stock market investing. Apart from that I subscribed to Economic Times newspaper and finding the content in that newspaper very interesting. I am summarising my learnings here.
- Long Term Vision (2-5 years horizon) is very important while picking up the stock. We need to continuously validate the prospects of it on a quarterly base.
- Some financial parameters to look for
- Clearly understand balance sheets, Quarterly and yearly financial results.
- PE (price to earnings = Share price / EPS) over period of 6 quarters is key to measure the growth of the company. This along with the Revenue growth is important.
- Another aspect is the debt pile over 6 quarters. I am still in the process of understanding this parameter. (with respect to revenues and asset growth)
- Cash reserves + asset growth over 6 quarters.
- Other macroeconomics
- Sector growth
- Unique position in the sector. The company may be the early comer or has a unique product to offer. (iPhone, Tesla cars)
- Restructuring efforts.
- up to date with the technology.
- Social, Climate and political factors that influence the sector
- are there any disruptive technologies in the pipeline. what is the company doing about it?
- Inflation and consumer interests.
- Accumulation of shares when the mood is not good but the growth prospects are intact.