Analyze stocks as an active investor
Instructions
- Test before you invest.
Open a testing account with fake money and track your results for at least a year to get a feel for how you would perform. - Analyze the individual stocks thoroughly:
Go through the following criteria:- Financial condition: Does the company have current assets of at least 1.5x current liabilities?
- Earnings stability: Is there no deficit in the last five years covered in the Stock Guide?
- Dividend record: Does the company have some current dividends?
- Earnings growth: Do the company's earnings from the previous year exceed those from the previous five years?
- Price: Is it less than 120% net tangible assets?
- Focus on low-multiplier stocks.
Compare the multiplier to the industry average to determine if it is low. - Purchase a diversified group of stocks selling under their net-current-asset value.
Calculate this value as Current Assets - (Total Liabilities + Preferred Stock) ÷ Shares Outstanding
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