Friday, November 30, 2012

Investment metric and considerations

1) Trend of EPS

2) Av. of EPS for business cycle and decades

3) Net current assets (Working capital), trend andaverage

4) ROE and ROA

5) FCF

6) PE, P/B, Net assets

7) Margin

8) Capital structure, Loan ratio

Qualitive take away

never buy when all is good,

-> bear market

->Temporary poor quarter results,

marginal company, only perform when market is favorable, check how company perform during crisis and industry downturn.

Other instructments to consider -index fund, preferences shares of large leaders position companies,