Phase # 5 Practice makes perfect. Lets take actions!
Practice makes perfectCongratulations! For making it more than half-way through the lessons. I am impressed by your level of commitment and dedication to become a billionaire
Ready? Let’s get brainstorming with some crucial real-time questions on how to practice in investing, how to be succeeded in investment, what are the stock market investing strategy to be applied? (…in order to make money from stock market and what are the criteria of stock investing?)
Then, how to make money from stock market? All the above questions are crucial if we wanna become a billionaire investor.
In order to become a successful in value investing (and to achieve anything in life), there is NO short-cut, except PRACTICE, PRACTICE and
PRACTICE. The more mistakes we made, the better results in the future we could achieve. All we gotta do is being patient, persistent and live your life at the
“There is NO free lunch in this world. We gotta work harder than anyone else in the world in order to be successful in investing.”
How to Practice in Investing
In the previous lessons, we have learned the fundamental analysis of value investing and factors affecting competitive advantage of a company and signs of good manager. Today, we’re going to take real actions on “the practice in investing” and make (real) money from stock market.
What are the practices needed in investing?
First thing first, before we learn how to make money from stock market, let’s take a look at the few ultimate successful value investing strategies as well as proven criteria which would enable us to make real money from investing with minimum risks.
What are The Stock Market Investing Strategy That Has Been Proven and Being Used Currently?
There are 3 proven methods that I am using at present, there are…
1. Intelligent Investing Methods
Step 1: Identify Great Businesses
Step 2: Buy them Only At A Huge Discount
Step 3: Wait For The Market to Realize a Stocks True Value Or Overvalue It.
2. Rule # 1 Method [Introduced by Phil Town]
Step # 1: Search for Rule # 1 company/business.
Step # 2: Calculate its “Value”
Step # 3: Acquire the $1 with 50 cents or 50% discount
Step # 4: Repeat Step # 1~3 until you become very rich.
3. The Warren Buffett Way [Introduced by R.G Hagstrom]
Focus on return on equity, not earnings per share.
Calculate owner earnings to get a true ref lection of value — companys net income plus depreciation, depletion, and amortization, less the amount of capital expenditures and any additional working capital that might be needed.
Look for companies with high profit margins.
For every dollar retained, has the company created at least a dollar of market value?
What are the criteria of stock investing?
In order to be successful in value investing…there few investing criteria to be followed…
– Criteria #1: History of Consistently Increasing Sales and Earnings
– Criteria #2: Sustainable Competitive Advantage
– Criteria #3: Future Growth Drivers
– Criteria #4: Conservative Debt
– Criteria # 5: Return of Equity (ROE) Must be Consistent & High at ROE > 15%
– Criteria #6: Low Capital Expenditure (CAPEX) Required to Maintain Current Operations
– Criteria #7: The Management is Honest & Competent at Capital Allocation
– Criteria #8: The Stock is Undervalued: Share Price is LOWER than Intrinsic Value. [Before you can know if you are buying at a good price, you must know how to calculate the intrinsic value.]
How to make money from stock market?
I am happy to share the detail checklist of step-by-step procedures in order to make money from stock market – Value Investing for Beginner:-
Make sure you have an online trading or online investing account [in the next phases of Pro-Value-Investing, details of how to register, how to setup and how to make your first trading will be guided through. Stay tuned!]
Keep practicing in data collecting skills, annual reports (financial statements) reading, data extractions skills, VERIFICATION and COMPARISON skills, watch-lists setting up, GOALS setting skills (know WHAT’S your TARGETED entry-price, WHEN to BUY/SELL, HOW low to buy/sell…etc)
Patient! Follow your pre-determined targets and personal values (your unique investment philosophy)…and
Build up your “following-up” habits! This is only a BEGINNING of your real-life-lesson – This include consistent reading ALL the financial statements and constantly update (at least 3-months-once) on your data-bank.
Constantly improve on you value investing skills!
…and REPEAT all the above until you become very RICH!
Once you have gained the very first practice in investing, you will find that the proven and successful money making lessons in Keys Value Investing were rather boring.
You’re right! Making money in value investing is BORING, lol.
Keep doing this “boredom” money making method until you become very rich. Then, share you unique value investing philosophy with the world. (Appreciate if you could share with my another website which is still under construction.)
Keep up your very good work…and…see you around in next lesson of (keysvalueinvesting.com/how-to-begin-investing-in-stocks ) – Enter the real-world of investing – Understand the Paperwork and Tax structure.
If you ever need any feedback or support regarding with the investing know-how and brainstorming discussion, I would be more than happy to connect. Simply leave your comments below and make sure you visit my site regularly as I am always updating it with lots of “A-ha” ideas and information that I come across that I know you will find interesting.
Posted by Mike.