Hi, I am interested in learning how to evaluate companies in order to decide whether it makes good sense to purchase their shares to hold for the long term. Pls could you recommend books that I could read on this. Thanks.
How To Read The Financial Pages by michael brett. I have had his book for 10 years and it still applies today. I am even going to read it again because i have started investing again.
I’d also recommend ‘Buffettology’ by Mary Buffet; “Why are we so clueless about the stock market” by Mariusz Skonieczny; and the ‘Zulu Principle’ books by Jim Slater.
Hi, I am interested in learning how to evaluate companies in order to decide whether it makes good sense to purchase their shares to hold for the long term. Pls could you recommend books that I could read on this. Thanks.
In my experience, to buy stocks to hold you need to be competant at making your own judgement call on the following in relation to any specific company you may look at;
The Business Risk - the risk that the company may not be making the same level of profits in 5-10 years that it is today - extremely difficult task for most investors (both professional and private)
The Financial Risk - the risk that management employ inappropriate levels of financial gearing which undermines the business in a downturn. Easier but a good grasp of accounting necessary.
The Valuation Risk - Even if you are sure you have a god business and there is not likely to be financial risk now or in the future, then you still have to ensure you do not over pay - again, not too difficult but can easily leads to losses if you overpay.
I too would recommend Ben Graham's 'The Intelligent Investor' and absolutely 'The Warren Buffett Way' by Robert Hagstrom.
Like others I would also recommend Ben Graham's "The Intelligent Investor" and I've heard a lot of people raving about the Warren Buffett books too but I'm yet to read any.