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How I Pick The Best Stocks: Investing For Beginners

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How I Pick The Best Stocks: Investing For Beginners

Date: 2021-05-19 18:36:10

Here’s my step by step guide on how I pick the best stocks to invest in. By the end of this video you’ll know my actual value investing strategies for picking great stocks.



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So there are 2 main ways to attempt to predict the stock market these are called technical and fundamental analysis. A good way to think about this is like a scale, usually short term day traders are purely focused on the technical aspects this includes looking at charts and patterns. They believe they can predict how the stock will change in price by judging the highs and lows on the graphs.

However like I mentioned it’s a scale, so I do cast my eye over the occasional chart in order to find the best time to buy. This approach has helped me find some really good investments over the years rather than just dipping in and out trying to make profit everyday.

Part 1: Quantitative analysis

This may sound quite daunting however it is relatively straight forward once you know where to look as it’s all public information. Whenever I am thinking of investing in a company I make sure to look at all these figure first, if the financials don’t look good to me then it’s very rare that I would do any further research into the company, you can find out this information for free on Yahoo Finance, which is the website I use.

There are three main aspects I look at, the balance sheet, income statement & statement of cashflow.

Now once I’ve had a look at all of these numbers it’s time to get into the juicy stuff and that’s all about analysing the qualities of a company, this is known as qualitative analysis.

Part 1: Qualitative analysis

1. Brand Recognition

When people are presented with a choice of 2 new things they nearly always take the choice they know and trust this means that these companies are much more resilient to threats from competition and when a companies brand name spans multiple languages that’s even better!

2. The News

I always keep an eye on it and in particular rumours on social media. You may have heard recently about the whole GameStop situation.

They were able to use this to their advantage to earn a lot of money. But once the news broke and more people started the jump on the bandwagon the big profits had already been made. This is a great example of the age old saying ‘buy the rumour, sell the news’. I have always invested in this way and whenever I am feeling a little bit of FOMO I know that I have probably already missed out.

3. The leadership of the company

Even more so nowadays with social media and what the leader says having a huge effect on the price of the stock.

Just imagine that Elon Musk decided he was bored with making electric cars and tweeted that he was standing down from Tesla to focus on SpaceX and his mission to colonize Mars. In my opinion the stock price would crash. I think this reliance on Elon Musk is one of Tesla greatest strengths but also one of its greatest weaknesses, as the company is highly effected by his actions.

4. Emerging Future Industries

These types of investments are really your growth stocks. My friend Simon Squib often tells me he believes that in the future, doctors will be replaced by artificial intelligence. I’ve learnt never to dismiss something I don’t fully believe.

5. Shift In Sector

During my time investing I have seen a huge shift within each sector. I remember sitting at my grandmas house and watching a guy come along with a sack of Coal on his back which he would deliver to my grandma so that she could heat the house. Nowadays, most people use gas so no more Mr Coal man and this sector is all set to change again with the introduction of renewable electricity.

So that’s 3 major shifts I will experience in my lifetime. If I had been stuck in my ways and not taken notice of these changes then my investments would be left in the past just like the Coal industry.

BONUS: When’s The Best Time To Invest?

There is a strategy I use to get around this and it’s called dollar cost averaging. This is also known as ‘Buying The dip’, instead of getting scared and selling like the majority of people would, the idea is to buy more because it’s like a garage sale and if you have done all your research, and you like the company then the stock is at bargain prices!

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*Some of the links and other products that appear on this video are from companies which Mark Tilbury will earn an affiliate commission or referral bonus. The Info in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

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