Invest Like Warren Buffett

Pick up his habits.

And tweak them for Indian stocks.

Get the skills. Invest better

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8 Top Stock Picking Methods from Benjamin Graham

Method 1. Deep equity research

  • How: Series of comparative analyses. Industry by industry.
  • What: Identify standard characteristics of an industry. Find the outliers.
  • Next: Study the outliers in detail. Both qualitative and quantitative factors.

Method 2. Wide stock screening

  • How: Quick glance at hundreds of snapshots.
  • What: Pick 5 or 10 that look interesting. From an earnings or current-assets standpoint.
  • Next: Study them. Both qualitative and quantitative factors.

Method 3. Superstars. Volatile markets

  • Find normal level: 7 year average earnings of BSE Sensex or NSE Nifty * 2 * 1/bond rate.
  • Buy: Start buying diversified portfolio at 20% discount. Buy more till 33% discount.
  • Sell: Start selling at 20% premium. Exit when 33% premium.

UltraTech: Stock Review (2020)

Why UltraTech Cement?

Two reasons.

One, it gives us a level playing field.

You see, I don’t know anything about UltraTech, at the time of first writing this…

So, we will do it step by step.

Properly.

With a familiar stock, I might foolishly skip steps.

Which defeats the purpose of your joining us today.

With UltraTech, we’ll be looking with fresh eyes.

And, the second reason goes to the heart of an important question:

How to get investment ideas?

Three ways.

First, is using your personal edge. Second is cold screening. And the third is scanning a sector.

This review falls into the third category.

Basically, we want to look at stocks in a bunch, so that there is some overlap in the work.

So, it’s a good idea to go through stocks, sector-wise.

And what’s the best place to start?

That’s right. Begin with a leading player in the sector.

So, if cement, then UltraTech.

Okay.

The next question is: