Thursday, May 3, 2007

My Investment Philosophy and Approach

My investment philosophy is greatly influence by one of legendary figures of investing, Warren Buffett. Warren Buffett is deemed as one of the most success investor in our times. Buffett is a strong beliver of value investing, he was of the belief that as long as the market undervalued them relative to their intrinsic value he was making a solid investment. In addition, he believes that the business has to have solid economics behind it and the price bought must be resonable.

The following are some questions that i would ask myself before buying a stock.
1) Does the company have a competitive edge over its compeititors ?
2) Is the debt-to-equity ratio low or is the earnings-to-debt ratio high?
3) Do the company talk freely to investor even when times of trouble and disapointment?
4) Can the company grow?
5) Are the owner earning on an upward trend with good and consistent margins?
6) Doe the comany has depth to its management?
Below are some of the Finacial Ratios that I normally look out for
2)Dividend Yield
3)Net Profit margin
4)Market/Book ratio
5)Debt Ratio
7)Inventory Turnover
Occasionally, I will use technical analysis to analyse stocks

No comments: