There are two times in a man’s life when he should not speculate: when he can’t afford it, and when he can.
Mark Twain – finance
"The stocks you select should show a major percentage increase in current quarterly earnings per share (the most recently reported quarter) when compared to the prior year’s same quarter."
Current Quarterly Earnings per Share
"When picking winning stocks , it’s the bottom line that counts."
Winning stocks
"Remember, however, that estimates are opinions, and opinions may be wrong. Actual reported earnings are facts."
Opinions and facts
"To say a security is ‘undervalued’ because it’s selling at a low P/E [Price-to-Earnings Ratio] or because it’s in the low range of its historical P/E is nonsense. Primary consideration should be given to whether the rate of change in earnings is substantially increasing or decreasing."
Price-to-Earnings Ratio
"Everything sells for about what it is worth at the time. If a company’s price and P/E [Price-to-Earnings] ratio change in the near future, it’s because conditions, events, psychology, and earnings continue to improve or suddenly start to deteriorate as the weeks and months pass."
On company’s value
Out of the ways a company can achieve enormous success, thereby enjoying large gains in its stock price, is by introducing new products into the marketplace. We’re not talking about a new formula for dish soap. These products and companies have to revolutionize the way we live.
New products to revolutionize our life
What seems to high in price and risky to the majority usually goes higher, and what seems low and cheap usually goes lower.
The Great Paradox in the stock market
The best way to measure a stock’s supply and demand is by watching its daily trading volume. When a stock pulls back in price, you want to see volume dry up indicating no significant selling pressure. When it rallies up in price, you want to see volume rise, which usually represents institutional buying.
Stock’s supply and demand
The number one market leader is not the largest company or the one with the most recognized brand name; it’s the one with the best quarterly and annual earnings growth, return on equity, profit margins, sales growth, and price action.
Market leader
The unwillingness of investors to set and follow minimum standards for stock selection reminds me of doctors years ago who were ignorant of the need to sterilize their instruments before each operation. They kept killing off patients until surgeons finally and begrudgingly accepted studies by researchers Louis Pasteur and Joseph Lister. Ignorance rarely pays off in any walk of life, and it’s no different in the stock market.
Ignorance in the stock market
Those who ignore what the market says usually pay a heavy price. Those who listen and who learn the difference between normal and abnormal action are said to have a ‘good feel for the market’
Listening market
It seldom pays to invest in laggard stocks, even if they look tantalizingly cheap. Look for, and confine your purchases to, market leaders.
Laggard stocks and market leaders
The rich know that it is financial intelligence, not money, that ultimately makes you rich.
Financial intelligence
It’s not about having the right financial answers; it’s about having the right financial abilities. [...] Answers are about the past, and abilities are about the future.
