1. The growth potential is reflected in five aspects: market expansion; Good design; Efficient production; Strong sales force; Normal profit rate. High returns are often counterproductive, such as technical ability. He took Sitex as an example, which developed a drawing computer software system. He likes companies that dominate the market, such as Main Safety Equipment Company, which produces vacuum safety equipment. "I would rather be the boss of the lily tube industry than the third in the tractor industry." Wang Er said. A TV station, a regional commercial street or a newspaper can form a local monopoly. Los company is a company with great advantages in the business center. It developed and built Valle Auditorium in Boston and built many projects in Baltimore. He likes the media company. He also likes Bei Le Company because it owns the radio station and the Dallas Morning Post. It is meaningless to look at their official earnings: what should be paid attention to is cash flow and asset value.
Then, Wang Ge looks for excellent management talents who are familiar with business, have strong marketing ability and focus on customers. The characteristic of the company he chose is that the manager has many consistent interests with the shareholders in the company.
2. Wang Ge wants to ensure that the company is in good financial condition, with low debt, sufficient working capital, sound accounting and sound balance sheet, so that it can achieve growth without using the shareholders' principal.
Finally, the price must be attractive. Wanger pointed out that institutional investors are confused about the company and its stock. You may own both a good company and its bad stock. In order to test its value in the market, Wang Er designed a touchstone that is always correct-stop testing. "What you do is to play a scene. Suppose you have a strange friend in the banking industry. He lent you a sum of money, and the interest rate was about 10%. You are going to change all your money into shares of the company you are studying and buy them at the current price. If you study this company, you can say,' Ralph Wanger introduced, man, this
That's great. This is a big deal. I will stop running that company. Then you may have found a good stock. If you say,' Boy, I think I'd better not borrow money. Then this stock is not a good stock, and you'd better find another way at this time. "
Investment and speculation
In order to evaluate stocks, Wang Ge has its own analysts to evaluate the future earnings or asset management status or development potential of enterprises, all of which were completed two years in advance. Then the computer calculates the appropriate price-earnings ratio at that time, then considers the customary dividend discount, finally determines the target price, and then calculates the expected rate of return that the stock can bring from the current price to the target price. Ralph Wanger's profile, and then he screened the rate of return, and then used it to examine the differences between analysts' expectations and market trends.
The power of speculation is the power to guess whether the market is going up or down. Through options, hybrid securities and other derivatives, speculators can buy speculative rights without actual investment. But for a real investor, pure investment power is enough for them. The "prudent investor principle" requires you to buy stocks to preserve value, just as you don't buy houses for trading. This truth is "no speculation", which is actually very wise. Because of this, many trustees have lost their beneficiaries, which is very common at present. Of course, a good investor will not only be satisfied with income and dividends, but will further predict the market in order to have big speculative gains. On the other hand, his income may not be as much as what others pay him. In fact, people are often willing to pay high prices for speculative rights. Therefore, maybe one should make use of their desire to get rich.