The information that I’m sharing today is how I personally pick stocks this may not be the best method for you so keep in mind this is just my personal philosophy this is not some written in stone and it’s not some rule that’s been you know used by hundreds of thousands of other successful investors this is just the way I do things so without further ado let’s get into it
number one is I like to use stock screeners so stock screeners if you don’t know all you have to do is simply go into Google and type in stock screener you’ll find a thousand of them you guys there’s a bunch of them I personally use Yahoo Finance and the way you can use a stock screener is that you can look at fundamentals and technicals of certain companies but what I like to do is stick to the fundamentals so essentially I’m more of a conservative investor I do hit doubles and triples every now and then but I like to consistently hit singles and doubles I’m not really swinging for the fences on any of these stocks you guys so keep this criteria with a grain of salt and keep in mind that this is just how I do things
so with these stock screeners the first thing I like to do is look at a dividend yield so I look for a dividend yield over 1.5 percent to me the shows that the company has cash on hand and that they’re giving out somewhat of a nice dividend over the long term so the second piece of criteria I look for is have they increased their dividend in the past X amount of years so have they consistently raised that dividend over the past five years over the past ten years over the past year I mean it just depends on what your preference is I personally look for the past ten years because that indicates a strong
management team and a strong money management philosophy number three as I look for a beta below one versus the S&P 500 so this is essentially showing me how risky the stock is or isn’t number four revenue growth so I look for revenue growth over the
past three years I’m looking for a consistent uptrend to make sure that the company is growing their revenue number five the price to book value ratio based on their peers in that industry so you want to see say for example you’re looking at a Citibank or another financial stock you want to look at all the other financial stocks in that sector and see the price to book ratio and see if it’s below their peers and same thing with number six the price the cashflow below their peers in that industry so same exact example that I just gave if you’re looking at Citibank you want to see if that price the cash flow is below their peers within that same sector number two read the company profile so I know this sounds pretty basic but you want to find out what the company does and how they make money so what I like to do is I like to pretend that I’m the CEO of the company and I really want to get to know every business sector within my company what this enables me to do is I’m able to consistently and succinctly describe what my company does in one or two sentences so you may remember one of my previous videos where I talked about I don’t invest in something unless I can describe it in one or two sentences or describe how they make money in one or two sentences the same philosophy goes here so if you can’t easily summarize what this company does and how they make money
forget about it that’s just my personal opinion number three read the most recent quarterly report so I look for things like revenue growth liquidity if the report matches what they say their company does if they’re kind of backing up what they say I’m they’re putting their money where their mouth is also where they’re spending their money and what their outlook for the future is so I know that this sounds pretty basic you guys but these things are held to a pretty high standard when it comes to especially when it comes to bigger companies and shareholders really do hold the board accountable to what they say in these reports so take a look at the most recent quarterly report to get to really know that company and where their outlook is for the next three to five years number four
compare that with past reports so to piggyback off of number three you want to take a look
these reports and see if they mesh you know are they kind of just talking out their rear end and one report and not following up with it in the next one so you’re looking for a trend of
consistency so you want to find out how they’ve progressed the year over a year both in numbers so quality quantitative and qualitative statements so
qualitative means you know the things that they’re saying in terms of
characteristics quantitative is numbers so year-over-year growth things like that so a perfect example of this is Amazon Amazon is expensive and when you look at it just from a straight-up number standpoint of what their one share of their company costs but they’ve grown a lot of their business areas so like the acquisition of Whole Foods and things like that in my last video I covered Amazon as one of the best stocks to buy for January and their
year-over-year growth in quarter three from 2017 to 2016 grew by about 39% it was insane so you want to compare past reports to current reports number five look at management board of directors etc anyone who’s kind of like the head honcho within the company you want to see who’s really running this ship who is the captain of this ship and do they know where it’s going so what I would recommend doing is actually finding out who they are whether it’s management or Board of Directors search them
individually and find articles or videos that talk about them and actually watch them speak there’s a ton of videos out there you guys of these people actually speaking are they someone that you can put your money behind are they kind of like sleazy are they in it for the money are they in it for that shares that they’re gonna dump at the end of the year or at the end of their employment you know a lot of CEOs they know they’re gone in two or three years that are just looking to raise the stock price and cash out so really do some research behind the people that run the ship number six last but not least look for public relations or PR about the company so the 10 Q or the 10 K can’t give you day-to-day operations but social media and the news can you know everything is current now you guys all you have to do is go to Google Finance or Yahoo Finance and type in a company or type in that stock symbol and it’ll give you all the recent bullet points and news about that company
so look over the past year or so because a lot of things can change within a year and again just for just look over for any red flags you want to make sure that they’re not in any major lawsuits or anything that’s gonna hurt the health of the company overall and that’s it you guys it was a very quick video but I think if you follow those six steps you should be 80% on the way to picking a decent stock obviously I’m not
Nostradamus and I can’t predict the future otherwise I’d be a
multi-billionaire but ultimately this has been pretty successful for me over the past twelve years of investing if at anytime from step one to step six you don’t feel comfortable you know just walk away from the stock there’s thousands of stocks out there you guys you don’t have to get married to anyone so take emotions out of it look at the numbers look at the people that guide the ship and make sure that it’s a good crew so ultimately you’re investing in the health of a company and I’m a long-term investor so I look for things that are gonna be in place for many years I look for long term growth your investment style or philosophy may be different but at the end of the day like I said if you’re if you’re using these six steps you’re pretty much 80% of the way there you guys good luck to everyone if you got any value out of this video whatsoever please hit the subscribe button below it takes a lot of time to make these videos and I don’t ask for anything in return
thank you so much and have a prosperous day okay so what we’re gonna do is I want you to pick a penny stock you’re gonna pick a penny stock and what’s gonna happen is I’m gonna talk about it on reddit okay we’re gonna talk about it on reddit
I’m gonna pump it up we’re gonna pump it up nice and high I’m gonna make a youtube video about it I’m talking about this penny stock that’s gonna go really high through the roof a thousand percent gains yeah let me get the blue marker yeah the blue in the green yeah million percent gains we’re gonna pump it up nice and high and we’re gonna make like I’ll not it’s not even right
I’ll teach you in November how I made a thousand sixty-six percent returns all you have to do is buy my course just twenty seven easy payments of eight million dollars I’ll teach you how I made eight million percent in November by my course
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