It is very important to gather complete information about the company or instrument in which you are investing. To get the answer to this question: Which stock is good to buy now?
When you are buying shares of a company, consider it as your own. Your investing approach changes as soon as ownership comes to your attention.
Imagine that you buy shares of a company you will get profit by selling it.
Now think about the second situation that you are buying the company itself. What did you say? Can’t even think of buying the whole company? When I say that you are really buying the company just imagine that you have crores of rupees and you are going to buy the company and become the owner of the company. What will you do now?
A little imagination Exercise
Let me tell you about my experience. The first time I read this mantra from world-renowned investor Warren Buffett, my outlook on investing changed. And I’m pretty sure it will change yours as well.
As soon as I met its management to buy the company, I threw a barrage of questions in front of them:
- What does the company do?
- What is the turnover of the company?
- How much is the income of the company?
- If there is no debt on the company, if so how much?
- According to the market, how is this company going to perform in the coming times?
There are many such questions that you should ask and find answers to.
The funny thing is that it all happened in a dream in a few minutes. But its effect is real. It is quite helpful in determining the stock in real. If you dream of getting success in investing, then you must do this five-minute exercise.
It’s not a rocket science
Peter Lynch in his book One Up On Wall Street mentions some very basic and simple observations. These observations could help you decide where to invest your money for exponential growth.
You see a small company in your neighborhood and find that it’s doing a really simple but profitable business. What this company does is simple to understand. And you find that this business will remain in demand in coming days. You know about the management and their transparency.
This might be a manufacturing company or a service business.
Will you invest in this company? The answer to this question is surprising. 80% of people will ignore this company. Why? Because it’s such a small and unattractive business. You will simply not be impressed by this company. Instead, you will go and search for a big company which is really known and popular. Everyone is talking about it.
You are wrong here. If you are able to get good information about this company is real, your analysis will be more accurate and to the point than any expert on those big TV channels, you see every day. This small firm raising up in your city will remain unnoticed by most experts until it becomes a multi-bagger. You know it very well though.
You know the answers to all these questions. There is no need to search on the internet nor do you need a book. To find a good stock listed on BSE or NSE read this step-by-step guide.
It’s all about Happiness, Freedom & Prosperity.
