Valuation of shares

Qualities of a good investor

Having given an introduction about valuation, and before I discuss more on the topic , I would like to talk about the qualities you may have to develop before embarking on a mission to value stocks.

I know, most of you would be of the opinion that this is a very silly post.  I’d put it this way – what’s easy and silly is easy to miss ! What many beginners miss  are those very simple basics.Since i’m primarily writing this for beginners, I think I have to say these points.

so here’s a list of traits you got to have :

  • First and foremost – Patience. Valuation is not an easy process. It may take a day or it may take months to analyse a stock.
  • Academic interest in the subject- You must do real research. You have to study a lot before investing.

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Finding shares to invest.

Hi there,

In this series of posts, I’m starting the topic of valuing shares, a very subjective topic.

There are many procedures commonly used by investment analysts to estimate the price at which a stock can be purchased.

Values can be ascertained based on assets that the company holds or the cash flow it’s expected to generate. Values can also be ascertained by comparing certain ratios like P/E to similar shares in the market.

Some methods are not for all- they are complicated and require expert knowledge in finance and accounts. Some are relatively easy, within the reach of everyone.

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