My dears, hardly any saying fits so well when it comes to choosing your own shares.
The cardinal question is:
"How do I find out exactly which stocks will bring me the biggest profits in the future?"
Preferably with minimal risk of loss.
🏭 Company in focus
Peter Lynch, one of the most successful fund managers in the world, recommends that all private investors
"Invest in companies and not in the stock market per se"
Lynch is referring to taking a close look at preferred companies before buying shares. Dear readers, just as I do for you in my company presentations.
🍔 The product has to be right
Buffet's motto is
"Only buy shares in companies whose products you know and like"
Buffet likes to call out to those who simply blindly chase stories to take their money to the casino.
Warren Buffet specializes in fast food. He believes in it, as he loves eating Big Macs himself.
🤼 The competition never sleeps!
If a public limited company is not a monopolist, you should always keep an eye on the competition when selecting shares.
Only those who are better than the competition in terms of products, prices, service and image can maintain and expand their market position.
Just think of Nokia, or watch how Tesla has ruined its image and lost market share in Europe as a result.
And only good future prospects for a company provide the necessary fantasy for the share price to rise.
👩💼 Managers with vision
A company is only as good as its management!
This old adage still holds true today. Perhaps more than ever.
In one of my posts, I asked you about this very thing. And my conclusion was that management was only important to very few of you.
New technologies and AI are changing the economy at a rapid pace. Managers have to look into an uncertain future that is coming at them faster and faster. Market share is no longer an inheritance. In the high-tech age, many products age faster than you might think. Companies have to launch new or updated products on the market at ever shorter intervals. This requires management to be highly innovative and flexible.
My dears, the best example is the transformation in the automotive industry.
Revenues are one side of the profit coin, costs are the other. Companies that can afford a large administrative apparatus with many hierarchical levels or still manufacture almost all the individual parts of their end products themselves are expensive to produce. They can then easily slip into the red. This is because high costs mercilessly eat up potential profits.
However, profit prospects are the decisive factor for a rising share price.
My dears, perhaps that's why I like to look at growth stocks so much.
(All written without the help of AI, so I hope for many 👍, then there will also be part 2. And thanks for reading)
The photo is generated with AI
