Stock Selection - Predictable Companies ( Part 1 )
Nobody can predict the market. Get this into your head. If they got it correct once or twice, it's just pure luck. Nobody can predict the market consistently. The stock market is very volatile. Having said that, I'm always on a look out for predictable companies. It's my NO.1 criteria. During a recession, the profits are not really affected.
How do I find predictable companies?
1) Cow Sense (Singapore language for common sense)
During my daily life, I walk pass many businesses. Which are the ones you know won't die due to a recession? Examples like McDonald's, Coke and Starbucks, do you see them expanding consistently even during a recession? These are places where I love to put my $$. Even if these companies don't expand, just by inflation alone, your capital will grow.
2) 10 years track record
There is one important number you will need to find. That is EPS ( Earnings per share ). Go google it, it's your homework. This is an important number, it determines how profitable the company is. Below is a sample of consistently growing company even during a recession while the other is subjected to market cycle.
Nobody can predict the market. Get this into your head. If they got it correct once or twice, it's just pure luck. Nobody can predict the market consistently. The stock market is very volatile. Having said that, I'm always on a look out for predictable companies. It's my NO.1 criteria. During a recession, the profits are not really affected.
How do I find predictable companies?
1) Cow Sense (Singapore language for common sense)
During my daily life, I walk pass many businesses. Which are the ones you know won't die due to a recession? Examples like McDonald's, Coke and Starbucks, do you see them expanding consistently even during a recession? These are places where I love to put my $$. Even if these companies don't expand, just by inflation alone, your capital will grow.
2) 10 years track record
There is one important number you will need to find. That is EPS ( Earnings per share ). Go google it, it's your homework. This is an important number, it determines how profitable the company is. Below is a sample of consistently growing company even during a recession while the other is subjected to market cycle.
Does all this business sound better then a friend telling you," I got stock tip." Or I heard from somebody's somebody. I only put money where I can sleep peacefully at night.
.. Ken
.. Ken
