The beginners struggle

[Joshuatree]

Here we go Justakiwi.
Read the latest annual report.
Should the chairman's outlook sound poor read no more.If you can not understand what the chairman is saying,read no more.
Should it be positive read the balance sheet.
Look to see current assets are twice current liabilities.
Take out intangibles and goodwill from assets.
Then see what the equity ratio looks like.That is shareholders equity divided by total assets [less intangibles and goodwill]
Some business such as a retailer or manufacturer you want the equity ratio near 50%.
Finance company,bank. or property company an equity ratio of 13% to 30%.Note each industry has different requirements,so compare apples with apples,ie companies in the same sector.
Cash flow from operations should [must] be positive.
At the very end of the annual report you will find a list of major shareholders.Check the directors have sizeable shareholdings.
Make a record of why you are investing in the company.If the reasons change decide whether to hold or sell.
Buffett says he gets 6 out of 10 right.So hang onto winners and sell losers.
Jim Slater "The Zulu Principle" says sell at first bit of bad news......Google The Zulu Principal by Jim Slater and read about it.[investing]
Always read company presentations and compare what they achieve against them.
Invest only in companies that do as they say they will do.
Take responsibility for all your investment decisions.Ignore Sharetrader noise.
Buy to hold forever.
I try to base my own decisions on facts ie announcements.February I will be watching announcements closely.And will decide my course of action accordingly.
If I do not understand anything in a company's announcement, I ring and seek clarity.CEOs CFOs are happy to talk to you so long as you ask sensible questions.

Thats a fab condensed nugget in a nutshell percy, i shall endeavour to repost it every now and then like i do KW's basic charting posts about when to buy and sell.