Thread by @finologyticker

Buying stocks is easy.

Buying the 'right' stocks is where the game begins.

Here's how you can pick great stocks in India 🧵

1) Financials

The first place to start is by analyzing the company's financial statements.

◦ Revenue
◦ Profit margins
◦ Debt-to-equity ratio
◦ Return on equity

If you don't understand these terms, start by reading up on financial statements.

2) Industry Analysis

The next step is to analyze the industry the company operates in.

◦ Growth potential
◦ Competition
◦ Barriers to entry
◦ Government regulations

It's critical to understand the industry dynamics while making investment decisions.

3) Management Quality

The third factor is management quality.

◦ Track record
◦ Vision for the future
◦ Corporate governance
◦ Insider buying/selling

Investing in companies with competent management is key to long-term growth.

4) Valuation

Finally, we have valuation.

◦ Price-to-earnings ratio
◦ Price-to-book ratio
◦ Price-to-sales ratio

It's important to invest in companies that are undervalued based on their financials, industry, and management quality.

Try valuation on ticker.finology.in

Combining these factors gives me a holistic view of a company and helps me spot potential multi-baggers.

But investing in stocks comes with its risks, especially in emerging markets like India.

Invest only the amount you can afford to lose.

◦ Diversify your portfolio
◦ Avoid high-risk sectors
◦ Keep a long-term horizon

Remember, investing is a game of patience and discipline.

Summary

1. Analyze financials
2. Analyze the industry
3. Evaluate management quality
4. Consider valuation

Invest wisely and enjoy the journey.