22/12/2021
Welcome to PART 2 of "4 Steps you need to know about picking stocks"
Step 3️⃣ Companies Strength 💪
So you have done your homework on TRENDS and have IDENTIFY the companies you are interested in. Now its time to take a deeper dive and UNDERSTAND how the company works and what makes it different. Prioritize companies with sustainable competitive advantages.
"The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage" - Warren Buffett
The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.
Beta measures volatility, or how moody your company's stock has performed over the last five years. Essentially, it measures the systemic risk involved with a company's stock compared to that of the entire market (You can usually find the beta value on the same page as the P/E ratio when doing your homework on the stock research pages such as those found at Google/Yahoo).
Step 4️⃣ See the charts 📈
There are many different types of stock charts around (e.g. line charts, bar charts, and candlestick charts). But reading these charts isn't always easy, In fact, it can be very complicated. But essentially, If an investment's chart starts at the lower left and ends at the upper right, that's a good thing. If the chart heads in a downward direction, stay away.
At the end Keep Your Eyes/Mind Open and be on the look out for the "next big thing".
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