Today just read about this book and I just pick a small title in there
which all things taught by Benjamin Graham
well inside he encourage value investing
According to his rules
1) The company that you invest is better not to be in cyclical sector such as technology.
For me I will avoid those volatile sector such as finance, steel which are all very volatile and cyclical
industries
2) The company sales must more than 340 million
normally I used to taught to calculate the increase of sales also together with the profit to show its aligned
if its not means the expenses had increased.
3) The current ratio of the company must be more than 2
4) Long term debt must lower than Net Current Asset
When I'm doing this analysis, I will trying to see whether the companies debts decrease in time or not, if
its increase I will find out what is the reason behind
5) Have a constant growth of EPS no negative earnings throughout these five year or in the five years
period
6) A company that you invest must have a price to earnings ratio (P/E) ((Share Price/Earnings Per
Share(EPS)) which lower than 15
and I normally limit to not more than 10
7)Price to book ratio = share price/share book value (P/B)
P/E *P/B must be less than 22
8)The debt to equity ratio must be less than 100%
9) The company must have constant dividend paid every year.
John P. Reese with Jack M.
Forehand,CFA,2009,The Guru Investor, How to Beat The Market Using
History Best Investment Strategies,Hoboken,New Jersey,John Wiley
& Sons.Inc
So these are the things I recorded after I finish read this chapter, there is a lot of other investors also which I will share out also after I done my reading.
If there is any comments, do comments ya, lets share our knowledge out
Enjoy guys
Happy always.
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