My Time

Tuesday, December 4, 2007

Stock selection - value hunting

Here's what Warren Buffett look for :-

- monopoly businesses (or best of breed company in that industry)

- consistent yearly Return on Equity of 15% or better. (if you want to make 15%+ return on your investment, let's make sure the company can too)

- consistent yearly earnings growth- great management (thinks like a shareholder)

- understandable business with good future long term prospects

- selling at a discount (figuring out the compounded rate of return based on future earnings growth and the future p/e multiple)

Best advice according to Warren Buffett "investment is most intelligent when it is most businesslike".

No comments: