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INVESTING....GENERATING IDEAS ON INVESTING!!
Investing is interesting and wonderful. And like i say, it only depends on how knowledgeable you are in the field that amount in your success in it.
Mind you, I will say that, to every successful Investor, there is always a "behind the scene." Yep, there is, and in this post am going to speak on that. I will try as much as it is humanly possible to break it down.
Because of the ever-increasing sophistication of market and financial data bases, all thanks to the sweet and intriguing handsome dude called 'Technology', There is now large space for Investors to easily screen more business attributes on successful Investments.
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Even though the rate at which top investors take advantage of that capabilities is not uniform, there is sweet success at the end run. They Check on opportunities, business ones, to deal with emotional instability in their business, as it is no good having a blind faith on your quality -if-managed biz.
Investors often start with screens on all aspects of valuation. Some characteristics, Proven over time to be associated with the above-average rates of returns like low equity/debt ratios, low P/Es, discount to book value, stocks with recent significant price, Companies with patterns of Insider buying and most times- stock with high dividends are all just part of the 'Screenings'.
So our much focus stays majorly on traditional Value metrics of low P/E, price/sales ratios and Price/book. We look for stocks trading ranging less than 2x book value, less than 15x forward earnings and lastly less than 1x sales.
Others are; a variety of balance sheet measures which may include Net cash times market value.
What am trying to explain here, is that we put much into consideration as to Companies or firms that screens well. We do that by analyzing the quality and the growth potential of that firm.
We screen and try to predict a build-up of cash. Companies that steadily keeps generating positively beyond their Expenditure Requirements (With Large Assets and low Liabilities) are hopefully going to do good things with those Liquid cash benefiting any Shareholder that wisely make business deals with it.
Summarily, an Investor have an edge of being able to see solid-not-easily-recognized patterns and be able to know what they mean. So don't be afraid of High quality Companies or their Huge costs, just follow closely behind.
They might suddenly have stocks that trade off sharply due to reasons Market related and your keen watch can discover them quickly before other Investors outsmart you since these 'Big Time' Firms can suddenly get remarkably cheap and most times swiftly fast!!
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