What to know about a Stock

[abgendel]

What are the most important things you want to check on a daily basis about a stock or the company when considering whether to buy or sell a stock?

[bjl584]

Looking at a stock daily will drive you crazy. Focus on more longterm aspects. Sales and growth forecasts, profits or losses, debt to income ratio, what it is trading at compared to earnings compared to it's peers, if it has a dividend look at the consistency of payout and dividend being raised at regular intervals.

[jpg7n16]

Originally Posted by abgendel

What are the most important things you want to check on a daily basis about a stock or the company when considering whether to buy or sell a stock?

Agreed with Brian - don't check on a daily basis. Imagine that you were required by law to hold the stock for 10 years (you're not, but just imagine). Then looking at the stock each day would be pointless. And if you wouldn't feel comfortable owning the business for 10 years, you probably shouldn't buy it.

If you're wanting to look into indiviual stocks, I highly recommend watching this video: Warren Buffett MBA Talk

It's 88 minutes long and worth every second.

As a summary - things to look for:
-do you understand the business?
-is it fairly predictable to estimate earnings over the next 10 years?
-is there some competitive advantage to the business you're looking at?
-does the company earn decently high returns on equity?
-who is running the company? are they honest and able?
-for the value you get, is it selling at a reasonable or low price?


But until you know what you're doing, stick with broadly diversified index type mutual funds.

[snafu]

Know something about the business/product. PE ratio under 12. Are you choosing it or is someone selling you a stock?