Investopedia has summarized Warren's stock picking methodology in the following manner:
1. Has the company consistently performed well?
[Return On Equity (ROE) = Net Income / Shareholder's Equity]
2. Has the company avoided excess debt?
[Debt/Equity Ratio = Total Liabilities / Shareholders' Equity]
3. Are profit margins high? Are they increasing?
4. How long has the company been public?
5. Do the company's products rely on a commodity?
6. Is the stock selling at a 25% discount to its real value?
You can read the whole article on the investopedia website.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment