It takes patience to earn in the stock market. Now Gurmeet Chadha has written about a friend that he is taking 10 Infosys shares every month since 2005, and now he has 12540 shares.
Warren Buffett’s wealth grew at a real rapid rate after he turned 65. This is amazing of compounding rate. Good companies in the stock market grow at a rate of about 20% or more.
A share is a part of a company. Therefore, if the company progresses, then your share will increase. Because the stock market gives good income, there is a demand for some hard work. So, never invest on anyone’s advice. Consultants are full.
How to find good stocks? First of all, take a look at the things you do on a daily basis. Companies often do well for things that are useful to you in your daily life. Peter Lynch’s wife brought a women’s robe from a nearby shop and was very pleased with it.
Lynch was surprised by the clothing thing at the Egg Braid shop. That company decided to sell it in such shops because where women go to the supermarket a couple of times a month, at least twice a week at these shops! Lynch found the company.
The company was making decent profits but its stock was cheap. This stock made a lot of money for Lynch. When the lock-down happened, I felt that two things would not be reduced.
Internet work and food. I invested in TCS, and invested in Tata Consumer, a company that makes pulses and spices. In the coming time, the era of electric vehicles will come.
While sona BLW’s IPO didn’t have much craziness, we got it easily. After that buy more, because, it makes parts of buttery cars for the biggest car companies in the world. Nowadays the shares of auto companies are down, because there is a problem in getting semi-conductors, therefore, cars are being made less.
This problem will be over in a few months. Some factors are easier to understand. One way to gauge a company’s performance is whether it is taking measures to get rid of debt. Pay a little attention to the company which is trying to become debt free.
Is it good. There are four important ratios. You do not need to calculate this ratio yourself. Is she using her capital properly? Return on capital employed (ROCE) is a good baseline measure of a company’s performance. ROCE is a financial ratio that shows if a company is doing a good job of derived profits from its capital. … In many cases, it can mean the difference between the company generating a positive financial return or losing money.
That is, is that company using its capital properly, to earn profit? Similarly, Return on equity (ROE) is the measure of a company’s net income divided by its shareholders’ equity. Meaning, how is she using the money she has in the shares. You will find both of these from many websites, such as Screener.
The higher the ROE and ROCE, the better the company is. Conversely, the PE should be low. PE is the ratio of a share’s profit to its price. This is also easily available. Lower PE means the stock is cheaper. If all the three ratios are good then you have got the treasure.
While Divis’ shares were at a high, Hikal’s PE was very low. Both were in business in the same field. Specialty Chemicals. That stock gave a lot of profit. Similarly, the shares of Caplin Point (Drugs) and ICICI Securities have come out on this scale and did well. No one was buying either.
The day the market got its attention, it was fun. Fourth is the work ratio, CAGR. CAGR shows the average annual growth of an investment over a given time period. Like CAGR of one year or CAGR of 5 years. It is assumed that the value of the investment compound over the period. , If your stock increases by 20% annually: in 5 years: 248832 in 10 years: 619173 in 15 years: 1540702 in 20 years: 3833759 in 25 years: 9539621 Warren Buffet started investing at the age of 10. Their wealth growing at compound interest rates is amazing, as you have seen above. Once you have an FD, you don’t break it, unless it is necessary. Share it like that.
You can take advantage of the downturn in the market by shopping. Do not sell the stock when the market falls. Sell only if there is a drastic change in the company or environment. For example, in the coming times, the days of petrol companies may not be good. As long as you don’t understand the market or lack the time (to research it), you can invest in mutual funds too.
There are many good flexi funds. You can read two books. Wealth Creation Study, 2020 and 26th wealth creation study, this is by Motilal Oswal, and you will get it free on the net. The second is ‘One Up on the Wall Street’ – Peter Lynch in Hindi and English, and is on Amazon. Invest, don’t gamble, stay safe.