@DS Wijesinghe wrote:
Yes I thought for sometime that you are a fresher but I started to doubt when sound investment advices given by some forum members continued to be sidelined and ignored by you, except for a mere Thank you. Nevertheless by and large I believe that you are a fresher and unfortunately had begun with a crappy group.
There are a few cardinal rules adopted by all time highly successful investors. Fortunately for freshers like you such information can be freely accessed today at a very early stage in Investing, where as I never had that luxury when I stepped in to the capital market in my early twenties. It was painful self learning indeed.
No.1 rule is, always invest with Certainty as Investing is not Gambling. Always invest in a company from an industry that you understand and like. You need to love the business of the company you invest in. For example If you don't like alcohol on principle, don't invest in companies operating in that industry.Also If you really don't understand what the business is all about, then you're gambling on them. Remember INVESTING IS NOT GAMBLING.
After you had figured out that you love the industry and the company, look at Return on Investment Capital (ROIC), sales, profitability, Earnings per share(EPS), Net Asset Value Per Share(NAVPS), annual dividend for a least 5 years.(preferably for 8 years). Compounded annual growth rates of these performance yardsticks need to be a minimum of 10% per annum during the 5 or 8 year period you are reviewing. The other measures are Net Cashflows and the Current Asset:Current Liability ratio. If the performances are not consistent with visible swings up and down, don't even bother to touch the company you are researching.
Before you invest in any business pay close attention to the people who run it. Do it even after you've invested in that business. Is the CEO a honest and a great leader? He/she HAS to be Shareholder driven and one who will have great ambition to take the company to greater heights.
If the management team doesn't have talent or integrity, they'll run the business into the ground and you'll be in danger of losing your capital. Therefore please carefully research the CEO and his track record.
Read very carefully the CEOs letter to the shareholders in the Annual Reports and quarterly reports. A good CEO would always make an effort to explain in a way that everyone can easily understand. If you are confused as to what the CEO is trying to tell the shareholders, it could be that the management is intentionally misleading and the company might be in trouble.
Above are some of the tips I have learned from some of the all time highly successful investors who beat the market annually, whether it is BULL or BEAR.
Hope that you will manage to come out of the current situation, victorious!!!