Sunday, 26 August 2012

Investing for the Long Run - An approach

Investment objectives.
1.  I am looking at a 10 year time horizon in this investment.
2.  My objective is to grow my initial capital 400% in 10 years, that is, doubling at the 5th year and quadrupling at the 10th year.
3.  The sum invested will be a big sum of meaningful amount (a fat pitch).

What stock to buy?
1.  Good quality growth stock, with durable competitive advantage and economic moat.
2.  Revenue and earnings growing at >15% per year, that are predictable and sustainable.
3.  ROE > 15% per year.
4.  FCF +++
5.  Good management with integrity

When to buy?
1.  When the stock price is compelling, that is, undervalued.
2.  A low buying price translates into higher returns on the invested amount.


lsb said...

Probable, note yield. yield indicates several possibilities: y is high, price is low, consistent payment yr in yr out indicates an honest management (needs it themselves, did not steal from company so no need to declare dividend), good management and can ride out the bad yrs), etc

Stock Market said...

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Anonymous said...

Could you recommend some stocks that fit your analysis?