🥤How to decide when to buy or sell stock
There are thousands of ways and it depends in many things: one's personal risk profile and personal circumstances, your personal view, etc.. My own personal screening yardsticks for $Dow Jones Industrial Average (.DJI.US)$ $S&P 500 Index (.SPX.US)$ $Nasdaq Composite Index (.IXIC.US)$ $SGX (S68.SG)$ are as follows:
1. Revenue and market cap > usd50 million. This is to exclude small companies with volatile earnings and share price.
2. Companies must be profitable in last twelve months with ROE >5%
3. Cash flow from operations under the statement of cashflow should be positive
4. There must be growth in revenue over a period of 3 years
5. Maximum PE ratio capped at 80
2. Companies must be profitable in last twelve months with ROE >5%
3. Cash flow from operations under the statement of cashflow should be positive
4. There must be growth in revenue over a period of 3 years
5. Maximum PE ratio capped at 80
Of course the first mindset is not to lose monies. Think of avoiding the downside first before thinking about making monies because as long we don't lose monies, any outcome will be better.
As long the stocks hit my criterion, this is a reasonable stock and I will buy it using my warchest. A slight drop in short term but as long it holds within your investment thesis, we should continue to hold the stocks until it reached our calculated IV. Don't be swayed or being influenced by the emotion apes 🐒. So, when is the right timing to sell?
As clarified above, selling stocks also very much depends on your personal context; but for me, once it hits the IV, it is now the timing to rebalance my portfolio. Well, IV is not cast in stone. It is vague. It is subjective. The value will moved based on your assumptions.
Well, the nature of investing is a math but it is also an art. Value is not a static number, it is like beauty, it's in the eye of beholder. It depends on your view on the stocks growth prospect. I believe all of us are certainly capable in deciding your beauty yardstick. Let me know your investment metrics. 😉
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