Investing

Learn the fundamentals of investing.

1. Do you understand the product or service offered by the company?

2. Will people still be using this product or service in 20 years?

3. Does the company have a low-cost durable (lasting) competitive advantage?

4. Is the company recession proof?

5. Has the company had consistent earnings growth?

6. Does the company have low debt?

7. Does the company have a good credit rating?

8. Is the stock undervalued?

9. Is the value of discounted earnings greater than the current market value?

10. Have you discounted at a rate equal or greater than the 10 year bond rate (risk free rate)?

11. Have cash flows been based on net income, plus depreciation, depletion, and amortization, less capital expenditure and additional working capital requirements?

12. Has the company been temporarily punished for a specific risk that is not a long term risk (the market tends to over punish the share price)?