This was posted by Pranjul Shukla on 11th September 2020 on our FinTalks Facebook Group.
Before reading this post, if you are just a beginner in the stock market, do check out the Basics of Stock Market & Investing thread to get lots of resources to start with.
How to find a perfect stock for long-term investment?
Firstly identify a sector you want to invest in and you should have a little knowledge about the sector like how the industry works how they make profits what are the weakness of the sector.
Now go to Tijorifinance and search for the sector and see whats the market share of which companies and also do check if the market share is increasing or decreasing.
For example, sbi had 25% of the market share in banking and hdfc had 7% but sbi’s market share has decreased by 3% approx and hdfc’s increased by 2% this shows that hdfc bank is growing. (Keep in mind that this was written in September 2020, and the current data may differ)
Now you’ll be left with 2-4 companies to compare amongst.
Compare them in different parameters and then you’ll be ditching 1-2 from them.
Now cross-check promoter holdings and all stuff we use to learn from books and also cross-check if there’s any dispute in management and also look for their track record, fraud cases, etc.
Now you have a company or two to invest in so put your money and keep weekly if not daily track of that company and also check if you get its peers at really cheap prices.
Note- sometimes small companies have some strong strength which can result in huge profits so look for that.
For example, suntek reality has a joint venture with sbi, and sbi purchases land and takes approvals as sbi is a government body process that gets faster resulting in more profits.
There’s a lot to write but due to less time will write that another day.
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