/biz/ - Business & Finance

>>28998493
1. I have to know the company. I have to understand what they do. Chinese strip club cock fights betting is not one of them for example. Cloud computing is.

2. I glance over the company at hypercharts or some other site I fancy that month. Just a quick check on fundamentals. Often it stops here because I see at a glance that something is off.

3. I look closely at debt, cash flow, revenue growth and earnings.
Stagnation is bad. If it isn't scalable it's bad. If the debt increases it's bad.

I also check if the company ever made a profit. Yes, I miss out on moonshots but I avoid buying a dream instead of a company.

4. I check what I would pay for that company and where I expect it in 5 years, usually assuming less growth and a stagnating pe. A lot of big companies fail here. Stuff like AAPL for example. A solid company I know and understand and have good numbers but they do in no way justify the current evaluation.

I beat the cubes with basically a few clicks a month. I never wake up checking my stocks because I fear they lost 10%.