💡
Structured framework for investing makes you Profitable and helps gain conviction...
Here you go..
10 Most Important things to check before Investing...
Detailed thread to bookmark for your future analysis...
First thing we need to focus while investing is..
(1/n)
Structured framework for investing makes you Profitable and helps gain conviction...
Here you go..
10 Most Important things to check before Investing...
Detailed thread to bookmark for your future analysis...
First thing we need to focus while investing is..
(1/n)
1 >> Earnings Growth
The company should earn higher than its sector or the company should have ability to grow their sales.
This was big lesson for me personally...low growth in India generally doesn't give good returns..
But just growth is not sufficient...
(2/n)
The company should earn higher than its sector or the company should have ability to grow their sales.
This was big lesson for me personally...low growth in India generally doesn't give good returns..
But just growth is not sufficient...
(2/n)
2>> Profitable Earnings
ROIC refers to NOPAT (net operating profit after tax) divided by total invested capital (net debt+equity).
Companies with high ROIC and re-investment opportunity and can return a lot of money
This is intrinsic compounding
But...there is more..
(3/n)
ROIC refers to NOPAT (net operating profit after tax) divided by total invested capital (net debt+equity).
Companies with high ROIC and re-investment opportunity and can return a lot of money
This is intrinsic compounding
But...there is more..
(3/n)
3 >> LEVERAGE
Leverage refers to the use of exogenous funds by companies to run their operations smoothly and expand the same. But, it also has a risk involved.
There is always the problem of being over-leveraged, so be wary of that.
Look at D/E ratio before investing
(4/n)
Leverage refers to the use of exogenous funds by companies to run their operations smoothly and expand the same. But, it also has a risk involved.
There is always the problem of being over-leveraged, so be wary of that.
Look at D/E ratio before investing
(4/n)
4>> Focus on Cash Flows
There is a popular saying in markets that what matters are not the profits generated but the cash flows generated
Also how the company is able to generate cash flow from reinvesting its cash flow for long period of time in
a profitable way.
And then...
There is a popular saying in markets that what matters are not the profits generated but the cash flows generated
Also how the company is able to generate cash flow from reinvesting its cash flow for long period of time in
a profitable way.
And then...
5 >> Excellent Management
There is no magic formula for evaluating management, but there are factors to which you should pay attention such as the perspective of the promoter,
reviews of their employees etc.
Intelligent fanatic promoter on great business can do wonders..
(5/n)
There is no magic formula for evaluating management, but there are factors to which you should pay attention such as the perspective of the promoter,
reviews of their employees etc.
Intelligent fanatic promoter on great business can do wonders..
(5/n)
6 >> Robust Business Model
The company should focus on solving a problem of the society.
That company has a great potential to grow. A company is bound to fail if it is not solving the problems of society.
Solid business model is the Key 🔑🔑
What about competition?
(6/n)
The company should focus on solving a problem of the society.
That company has a great potential to grow. A company is bound to fail if it is not solving the problems of society.
Solid business model is the Key 🔑🔑
What about competition?
(6/n)
7 >> Competitive Advantages
Competitive advantage refers to a company's ability to produce goods and/or services more cheaply or at a higher quality than its rivals
Some factors that you can consider are brand value, switching cost, network effects, low cost, IP etc.
(7/n)
Competitive advantage refers to a company's ability to produce goods and/or services more cheaply or at a higher quality than its rivals
Some factors that you can consider are brand value, switching cost, network effects, low cost, IP etc.
(7/n)
8 >> Longevity
Corona has made us realize that it is really important to survive no matter how difficult the situation is.
Look for growing sales and whether the growth
suggests longevity versus the reflection of a one-time boon.
Also don't miss the next critical point
(8/n)
Corona has made us realize that it is really important to survive no matter how difficult the situation is.
Look for growing sales and whether the growth
suggests longevity versus the reflection of a one-time boon.
Also don't miss the next critical point
(8/n)
9 >> Excellent Capital Allocation
The two goals of capital allocation are:
✅To efficiently use the cashflows to profitable places or return to investors
✅ To optimize on getting the capital from different sources and make good use of it
Finally..
(9/n)
The two goals of capital allocation are:
✅To efficiently use the cashflows to profitable places or return to investors
✅ To optimize on getting the capital from different sources and make good use of it
Finally..
(9/n)
10 >> Technical Strength
Parameters like all-time high, 52 wk high or how is the overall growth, etc just to get the confirmation that whatever I understood with fundamental side is resonating with technical side.
To learn more, listen to full podcast:
bit.ly/3lihb1c
Parameters like all-time high, 52 wk high or how is the overall growth, etc just to get the confirmation that whatever I understood with fundamental side is resonating with technical side.
To learn more, listen to full podcast:
bit.ly/3lihb1c
• • •
Missing some Tweet in this thread? You can try to
force a refresh
