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Simple And Practical Way Of Stock Selection.

2011/2/25 15:59:00 47

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We always think Shanghai and Shenzhen

market

Long term holding is not profitable unless it is bought at the bottom of the market.

But we would be surprised to find that the first batch of stocks listed at the earliest, we would be surprised to find that there is a considerable number of them.

Last year it hit a record high, and a large part of the company's historical difference reached dozens of times.

In other words, even at the highest level of the previous year, they still had substantial profits last year, indicating that these companies have long term value.

Now, we propose a simplest way of long term stock selection.

There are four principles for stock selection.

Principle: small dishes.

Why did some ten years ago stock hit a record high? A key factor is

equity

Expansion capacity, and only small dishes have greater capital expansion capability, so the size of the plate is the key. The first principle of our long term stock selection is small dishes.

The plates here are the total plates.

There are still many small plate stocks in the market, and there are plenty of them. We have enough choices.

Principle II: leading companies in subdivision industries.

We all know that the leading companies in the industry are good companies. But the first is that these companies are large in size and have limited capacity to expand their capital stock.

But if the industry is different, many of these leading companies have the basic conditions for capital expansion.

Principle 3: the industry is promising.

The company in the sunset industry will face the dilemma of pformation in the future. The process of pformation is longer and will not necessarily succeed at the end.

In addition, some new industries also have some risks. After all, the future market is hard to predict.

The safest way is to choose a segment that has been relatively mature and will not lag behind in the foreseeable ten years.

Principle 4: PE is low.

According to these four principles, it is very easy for us to choose stocks. First, we should make a preface to the total capital stock (or total market value) of the listed companies at present, choose from a small age, and then choose the leading companies in the sub sectors. Finally, we will screen the selected sub sectors.

It is relatively difficult to judge the subdivision industry.

For example, the automobile industry is definitely a promising industry, although there will be some fluctuations in the short term, but it will be a long run for the better.

But we do not choose the industry leader, because such companies must be big dishes, so we choose to divide industries, such as tires.

However, the leading companies in the tire industry may not be too small, so we need to choose more subdivided industries, such as the steel cord industry for meridian tires. The leading companies may meet our requirements. If the current PE is low, we can buy it, and wait patiently for a few years. Maybe there will be unexpected surprises.