- Select Stocks with 25% to 50% and higher annual earnings growth rates
- The annual rate of earnings growth for the companies you pick should be 25% ...100% or more
- 2) Look for big return of equity
- ROE is calculated by dividing net income by shareholders equity. This shows how efficeintly a company uses its money there by helping to seperate well managed firms from those that are poorly managed. ROE atleast 17%-50%
- 3) History demonstrates most bull markets last 2-4 years followed by bear .
- 4) In the beginning phase of a bull market growth stocks are usually the first to lead and make new price highs
- 5) 3 out of 4 big market winners in the past were gowth stocks 1 in four was a cyclical
- 6) Rallies in cyclical stocks may tend to be more short lived and prone to failure at the first hint of recession on anearning slowdown
- 7) Insists on a 3 year annual earning growth this would weed of 80% of stoicsk in any industry
- 8) The stock of a company hthat has an outstanding 3 year growth record of 30% but whose earnings growth has slowed to 10% or15% in the last several quarters acts like a fully mature growth stock. Older and larger organizatin sare usually characterized by slower growth and many of them should be avoided
- 9) The fastest way to find a compnay with strong and accelerating current earnings and solid 3 year growth is by checking the proprietary EPS
- ITS ALL ABOUT GOOD EPS
- 10) Contrary to most investors beliefs p/e ratios were not a relevant factor in price movement and have very little to do with whether a stock should be bought or sold
- CONSIDER EPS UP OR DOWN
- User P/E t estimate the potential price objective for agrowth stock over the next 6 to 18 months
- for e.g. Atock breaks out its first base at 50Rs and its P/E ratio is 20
- multiply (20*(120/100))* EPS = stock price in the future.
CONCENTRATE ON STOCKS WITH PROVEN RECORDS OF SIGNIFICANT EARNINGS GROWTH IN EACH OF THE 3 YEAR + STRONG QUARTERLY IMPROVEMENT .. DONT ACCEPT ANYTHING LESS
Tuesday, September 29, 2009
How to make money in good and bad times
NOTES: just for personal pupose..
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