Looking to buy stocks for long-term?

Muhurat Trading is near and it’s a saying that buying a stock on this auspicious day will give you good returns.

So are you too planning to invest for the long-term and confused about how to start? Here are a few tips that can help you to make better decisions while buying a company.

  1. This starts with the book recommendation- Once upon a Wallstreet (a personal favorite) and The Five Rules for Successful Stock Investing by Pat Dorsey. It is an excellent manual for investors and gives the best introduction to how to analyzing a stock and how simple it is to invest.

  2. After that, you understand the business by reading its annual report for the last 3-5 years (at least 3 years). Go through any brokerage reports that you may get about the company. Avoid the target price that brokerage reports mention.

  3. Basics ratios like ROE and ROCE are high. Debt/Equity is low. The company makes consistent operating cash flows and profits.

You can also access this information real-time in Dhan’s fundamental / financials section.

  1. Till now you understand what the company does, now after reading all those reports you might be able to figure out and project a range of sales and profit for the next 1-2 years.

  2. Once you get the hang of what the company does, start with being conservative PE and see how the stock price might look a year or two down the line.

If it sounds like too much work we already have a few business stories here-

  1. Business analysis of – Amber Enterprises

  2. Borosil renewables - The Business Cracking Solar Glass Ceilings!

  3. Amber Enterprises – Making Peers Cold!

That’s it! Let me know what you buy :smiley: