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YAIT: What criteria do you use for picking investments?

O

Orsorum

Lifer
I sincerely hope some people are interested in this subject; I find it fascinating and interesting to collaborate with other people.

My criteria:

Stocks:
- consistently good dividends (6% plus)
- good financial shape
- balance sheet
- sales growth should be >= than inventory/receivables growth
- ratios
-----steady EPS growth
-----ROE >= 20%
-----buy when trading less than 1.2x share book value
-----low P/E ratio compared to industry (VALUE)

Mutual Funds:
- low expense ratios (I am a huge fan of Vanguard funds)
- no-load (in general, there are some load funds that have done extraordinarily well)
- manager tenure - this is kind of a random choice, but I look for funds with at least a 5-year manager tenure.
- 10-year returns that beat the S&P500

Fixed-Income Investments:
- return higher than inflation
- that's really about it
 
I'm not that sophisticated, math and math-related things frighten me. I use my gut and the graphs. If I know about a company and their products I look at their graph, if it's lower than it was historically and the company is still in good shape, I buy.

 
I don't; I leave it up to experts who have experience and all day to do a better job than I could possibly ever do.
 
Originally posted by: Skoorb
I don't; I leave it up to experts who have experience and all day to do a better job than I could possibly ever do.
Click to expand...

not a bad answer. I'd go a step farther and say that I will leave it up to the market and just stick with a passive index fund (something like the R1000 or R2000). I don't think anyone (professional or not) can consistently beat the market through stock picking and/or market timing.
 
Originally posted by: Skoorb
I don't; I leave it up to experts who have experience and all day to do a better job than I could possibly ever do.
Click to expand...

If they were so good, wouldn't they be sipping drinks in coconut shells while their investments rolled in the cash for them?

When I invest, I'm going to try to make good friends with someone who has done it right.
 
Well right now I am not invested in anything. When I am able to invest I will put 50% in fairly safe investments. The other 50% will be put in individual companies that are in dire shape, but have good new management or some such. I figure I have at the earliest 25 years before I can retire regardless of my financial situation.
 
Originally posted by: Chaotic42
Originally posted by: Skoorb
I don't; I leave it up to experts who have experience and all day to do a better job than I could possibly ever do.
Click to expand...

If they were so good, wouldn't they be sipping drinks in coconut shells while their investments rolled in the cash for them?

When I invest, I'm going to try to make good friends with someone who has done it right.
Click to expand...

Agreed. At this point, I'm adopting proven strategies by investing heavyweights and picking 10 or 15 stocks I plan to eventually own. I'll start with the ones that are most stable right now and go from there.

And, yes, I do plan to hold a Vanguard index fund in my IRA; regardless of my tax situation, it will be nice to have 45-50 years of unaldulterated growth for that.
 
another money related thread from Orsorum? I think you are obessed with money! I bet you will kill your friends for money too!

rich
 
Originally posted by: richardycc
another money related thread from Orsorum? I think you are obessed with money! I bet you will kill your friends for money too!

rich
Click to expand...

I will kill many people for money.


Do you have money?
 
Originally posted by: Orsorum
Originally posted by: richardycc
another money related thread from Orsorum? I think you are obessed with money! I bet you will kill your friends for money too!

rich
Click to expand...

I will kill many people for money.


Do you have money?
Click to expand...


no I have no money, but I will give you a stock tip, buy FBR, I think it has everything you are looking for in a stock. do your own DD.
 
My Investment Strategy:

I call Bob. In the last 8 years, he's only picked one bum stock, and I only lost 5% on it. In everything else, I've seen significant increases. Riding out the whole slump over the last couple of years had paid off, too.
 
Originally posted by: richardycc
no I have no money, but I will give you a stock tip, buy FBR, I think it has everything you are looking for in a stock. do your own DD.
Click to expand...

I try not to pay attention to stock tips.

I am looking at KCDMY, VLCCF and NAT myself.
 
Gut feeling and decent knowledge of the industry and various trends. Not that scientific, I know, but it has yet to fail me.

Remember, you can sometimes do better by throwing darts 😉
 
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