The Secret Sauce
First, let me congratulate you on taking that first step...
The possibility to 3X, 5X or even 10X your money seemed exciting...
And many investors have salivate over the possible returns...
Which is also why many have bought into the HYPE of the next BIG thing...
Crypto, The Metaverse, Artificial Intelligence, NFTs...
Unfortunately, most BIG thing ends up in the sewers.
But you're smart...
You know you can't depend on 'One Hit Wonders'...
If you truly want to make a fortune investing in the stock market
You need a solid and proven strategy that can be repeated over and over again...
So that you can make money today...
Tomorrow...
The day after...
A year after...
5 years from now...
10 years from now...
20 years from now...
Make sense??
So instead of focusing on how much returns you can make...
FOCUS on the BUSINESS
Focus on finding SUPERIOR companies with a SUPERIOR business.
That should be your goal as an investor.
So how do we do that?
There are over 6,100 companies listed on the NASDAQ and NYSE.
What you want to do is to weed out the 'pretenders'.
You do that by 'layering' your defenses...
With each layer, you are naturally filtering and peeling out the junky, lousy companies.
Because as you cover your downside...
Your UPSIDE will take care of itself
In other words, you are giving yourself the highest possible chance to making the right investment decision.
So here's a quick 10-minute method to build your growth stock watchlist...
Head down to your favorite stock filter tool, and try to lay down as many of these defenses as possible:
- Revenue growth over last 10 years
- Earnings growth over last 10 years
- Return-on-equity > 20%
- Debt-to-equity <1.0
- Strong cash position
- Healthy, positive cash flows
Once done, you should be left with a few hundred companies
The next thing you want to do is to go through the company's quality of the business.
Here are some general guidelines:
- SUPERIOR business model (ease of making money)
- SCALABLE business model (ease of expanding)
- Economic MOAT to protect market share
- GROWTH drivers/engines
- Strong RECURRING revenue model
Keep those who passed the above criteria..
And discard those that doesn't.
=)