The real world of investing

There are 10,000 publicly traded companies in the US markets.  There are 1,000 publicly traded companies in the KLSE.  With so many companies out there to pick from, only a small minority will be suitable as LONG-TERM INVESTMENTS.

This means the great majority of companies you investigate will be unsuitable.  You should take some pains to screen for companies that meet your requirements.

If you don't realize this up front, and accept discouragement as a normal part of the process, you may tire of discarding company after company and give up.  Worse yet, you may relax your requirements and accept companies that don't come up to snuff. Either way, you'll lose.  

Remember:  You need to own only about 10 to 20 good stocks - that's all!  And there are plenty of companies to choose from to populate your portfolio.  So be patient and disciplined.  

Assemble a list of companies based on your quality criteria.  You will usually find that even if performance on your quality criteria has persisted - and this is usually the case for most - you'll find the price for many of these stocks unattractive.  When you first assemble this list, make no effort to assess the price, just the quality.

Some of these companies have been around a long time and are familiar to you: others are not so well known.  All have been publicly traded for at least 5 years on the major exchanges and all have revenues of more than $100 million.

The moral of the story here is that you should keep the faith.  There are plenty of fish in the sea for you, even though the sea is enormous and there are many more losers than winners.

How to Pick Good Stock for Financial Freedom During Retirement

Pick Good Stock
And You'll Be as Successful as Warren Buffet


Investing in stock for retirement is not a new idea, but many are still sceptical of becoming rich from stock market income. If you are one of them, you might hear bad things about making money in stock market, bad enough that keeps you away from putting any money in any stock. Instead, you should learn how to invest in stock if you determine to become financially free.

The truth is, many succeed and why you can’t?

Once you’d master all the techniques, you are on your way to make fortune way beyond your wildering dreams. And these financial ratios are enough to get you started.

Minimum 15% Earnings per Share Growth Rate (EPSGR)

EPSGR is an incremental value of Earnings Per Share (EPS) annually. Stock with the highest EPSGR means it grows the fastest in that year than the rest. Consistently performing 15 per cent EPSGR is an indication of outperform, and 20 per cent EPSGR is superb. High EPSGR for the past five to ten years shows that the company has excellent products with great demand. Growing demand will eventually give the company some leverage opportunity through economies of scale.

You can ride on their very strong growth by owning these stocks.

Minimum 15% Return on Equity (ROE)

Return on Equity (ROE) is a comparison of the stock’s net profits to its shareholders’ equity.

ROE indicates how much you can gain if you had decided to invest in the stock at that period. Companies with 15 per cent ROE or better is able to utilise their shareholders’ money for maximum profits. On the other hand, ROE of less than 10 per cent is a sign of lack in management and business skills. In fact, you shouldn’t buy stocks that have ROE 5 per cent or less. Virtually, you can get the same return with zero risk with cash deposit.

After all, what’s the point of taking greater risk and yet get the same return?

Maximum 60% Debt to Equity Ratio (D/E)

D/E shows how much debt the company is taking to finance its business operation. You can calculate it by dividing the company’s total debt by the total number of available equity. You will know that the company is gearing too much if its D/E is greater than 1. This will give you an overview on how sensitive the stock is from the ever rising interest rates. Nevertheless, there are capital intensive industries which require huge financing sum from others due to their business nature.

Try to avoid these stocks to preserve your capital for the golden age.You must take into consideration these financial ratios in total to define how valuable your investment decision is. Picking one with dying business doesn’t make any sense to me, and the same should apply to you too! But don't forget to use some qualitative methods as well to pick good stock. After all, picking a good stock requires homework and effort. Trust me, it is well worth it.

http://www.stock-investment-made-easy.com/pick-good-stock.html

Unlimited Profits From Good Stock Pick. Be Choosy and Consistent in Your Stock Selelction Criteria

Having A Good Stock Pick
Is Your First Step to Make Money in Stock Market

Summarized Overview

In this article you will find information about how to select a good stock quantitatively, why the strategy is so important and the critical key financial ratio.

You will also find information on what is important in corporate annual reports.

Reasons to Have Good Stock Pick Strategy

Though there are thousands of stocks in stock market nowadays, not many of them are worth investing. In ever changing business environment, it is not easy for companies to remain profitable.

Worse, hardly any of them have shareholders' interest at heart. That is why, stocks represented by quality companies with effective management team is the key to get a higher investment return.

My Five Stock Screening Criteria

A good stock pick should've consider effective management as it is everything in sustainable stock investment. Thanks to financial ratios, picking good stock is just a simple math away.

Above average EPSGR and excellent ROE is my first stock screening criteria to filter rubbish stocks in the stock market. You can choose any figure which you feel comfortable. But, the figure 10 I chose is because:

• 10 per cent EPSGR shows that the company has reliable high demand products or services.
• 10 per cent ROE shows that the company are managing shareholders’ fund effectively.
• 10 consecutive years means the company able to survive the ups and down of the market, business cycles or the ever-increasing competition.

Past performance doesn't guarantee anything in the future for sure, but it is the best information for good stock pick. Should there be no changes in it's business foundation and it's management, profit will continue to be sustainable. For any circumstances, effective management will find ways to stay ahead of competition.

On top of that, i did consider:

• less than 0.6 debt to equity ratio (D/E) so that the company has manageable debt during economic crisis.
• high profit margin which shows the management really did a great job in reducing operating cost to maximise profits.

Be Consistent in Your Stock Selection Criteria

You have to be choosy and determined in selecting which stocks you'll be investing in.


If you love speculative stocks, this method is not for you. Rumors and hot tips are just not my taste.

But if you are serious ininvesting for long-term, or value investing as what Warren Buffet did, this good stock pick can easily get rid of junk and worthless stocks straight from the beginning.

Test yourself, and see the result!

http://www.stock-investment-made-easy.com/good-stock-pick.html