Most important thing when investing in stocks

    There are many important things but maybe the most of all is to know the business you are investing in. People are in a huge rush to get rich and mostly they spend little time to check the business of the company they are investing in. And mostly they are buying a stock looking only at things like margins, indicators, price trends, etc. It mostly leads to a massive diversification or buying an ETF or basket of ETFs which consequently brings poor performance.

    If you want to make a good investment you need to know the business in details and not only  firm's but also the sector and the market(country, region) in which it operates.

    How I do it? I have a kind of a list in my mind, it looks similar to this below:
  • What is the product of the company?
  • Is the firm is still managed by it's founder?
  • Which are the competitors of the company?
  • Does the business depends on a commodity?
  • Is there a cyclicality in the sales?
  • How is performing the management of the firm?       
  • How much the sales are falling or growing in good and bad periods?
  • Does the company needs a lot of loans for it's operations?
  • When does the company receives the cash? In the case of Walmart it is immediate but most companies receive the cash after months or in pieces.
  • Inventory specifications. Like, is it durable? Or, how long could be stored? There are products which could be sold for the same price 3 years after the production. And some as food which will be obsolete in a month.
  • If possible visit the company.
  • Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years?
    My thoughts about investing are constantly changing. This is what I thing at the end of 2019 after 3 years of investing experience.

The best books to read on investing

           There are many books written on investing and it is hard to tell which is the best. I am in search for the best since 2016. Here ...