One up on wall street.

           ONE UP ON WALL STREET.

● To my mind, the STOCK PRICE is the LEAST USEFUL information you can track.

● Sooner or later EARNINGS MAKE or BREAK an investment in equities.

● Wherever you invest in any company, you are looking for its MARKET CAPITALIZATION to RISE.

Market capitalization = no. Of outstanding share ÷ Current market price.

● NEVER invest in any company before you have done the HOMEWORK on company's earnings, financial conditions, competitive positions, plans for expansions and so forth.

● You don't need to make money on every stock you pick. 6 out of 10 WINNERS IN A PORTFOLIO CAN PRODUCE A SATISFYING RESULT.
Your losses can't go lower than zero but there is no limit on your gains.

● Stay invested.

● A company do better than before, its stock will rise if a company does worse than before its stock will fall.

● Find a company that continue to INCREASE their EARNINGS.

● When you sell in DESPERATION, you always sell CHEAP.

● Any normal person using the customary three percent of the brain can pick stocks.

● The more right you are about any one stock, the more wrong you can be on all the others and still triumph as an investor.

● LOGIC is this subject that helped me the most in picking stock.

● If a stock is DOWN but the FUNDAMENTALS are positive, it's better to HOLD on and even better to buy more.

● Buy the right stock at the wrong price, at the wrong time and you will suffer a great loss.

● The big Winners come from the so-called high-risk categories.

● Stand by your stocks as long as the fundamental story of the company hasn't change.

● The best place to begin looking for the tenbagger is CLOSE TO HOME.

● EARNINGS make stock price go higher.

● The value of asset per share exceeds the price share of the stock, then you can truly buy a great deal of something for nothing.

● Never invest without research.

● All you have to do is put as much effort into picking your stock as you do into buying your groceries.

● If you are considering a stock on the strength of some specific products that company makes, the first thing to find out is : what effect will the success of the product have on the company's bottom line.

◆Six categories.◆

(i) SLOW GROWERS.
--> Expected to grow a little faster than gross national product.
--> Those company also pays dividend.
-->Yesterday's fast-growing companies are today's slow growing companies.

(ii) The STALWARTS.
--> Stalwarts are companies such as Coca-Cola, PG, Colgate.
--> Companies which are faster than slow growers.
--> 10% to 12% annual growth in earnings.
--> If you own stalwart and the stock has gone up 50% in a year or two begin to think about selling unless there is some startling new development.
--> They offer pretty good protection during recessions and hard times.

(iii) FAST GROWERS
If choose wisely then this is the land for ten to forty baggars even 200.

(iv) The CYCLES.
--> Auto, steel, chemical, Airlines, tire are all cyclical companies.
--> TIMING is everything in cyclically.

(v) Turn around.
(iv) The asset play.

◆ A perfect stock should contain.◆

--> It should sound dull.
--> Should not be popular stock.
--> There's something depressing about it.
--> No competition or very little competition.
--> People have to keep buying it.
--> The Insiders are buying.
--> Company buying back its shares.

● If the stock price drops after the INSIDERS HAVE BOUGHT, so you have a chance to buy it CHEAPER than they did.

● There's only one reason insiders buy: they think the stock price is undervalued and will eventually go up.

● If I could avoid a single stock, it would be the hottest stock in the hottest industry.

● Negative growth industries do not attract flocks of competitors.

● Another stock I would avoid is next IBM, next intel, next McDonald's, next Disney Etc.

● A share of a stock is not a lottery ticket, It's part ownership of a business.

● If you remember nothing about PE ratios, remember to AVOID stocks with excessively HIGH ONES.

● Earnings are supposed to grow.

◆ Five basic ways company can increase earnings.◆
--> Reduce cost
--> Raise prices.
--> Expand into new markets.
--> Sell more products in Old markets,      --> Revitalized, or closed or disposed of losing operation.

● The PE ratio of any company that's fairly priced will equal its growth rate in earnings.
(A PE ratio half of its growth rate is very positive and one that twice the growth rate is very negative.)

(i) Good if have lot of cash Reserve.
(ii) Debt should be one percent equity should be 99 percent.

● If you do plan to buy a stock for its dividend, find out if the company is going to be able to pay it during recessions and bad times.

● A 20% grower selling at 20 times earnings is much better buy then a 10% grower selling at 10 times earnings.

● If a stalwart has gone 40 percent and  nothing wonderful has happened with the company to make me think there are pleasant surprise ahead, I will sell it and replace it with another Stalwart.

● When I am 25% down, I am a BUYER, not a seller.

A finance book written by Peter Lynch.
HAPPY READING!