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LET US LEARN HOW TO INVEST IN A COMPANY, AND BUY ITS SHARES-Forget networth please. NETWORTH COULD BE MISLEADING

LET US LEARN HOW TO INVEST IN A COMPANY, AND BUY ITS SHARES-Forget networth please. NETWORTH COULD BE MISLEADING



Image result wey dey for THE PICTURE OF WARREN BUFFET AND JEFF BEZOZ

When a company registers in the stock market, and certified to sell shares. It goes public. The shares it sells then is called-Initial Public Offering-IPO. At this point, you can say the company sold the shares in the primary market.

NOTE:
Before the IPO, the company can sell the shares before going public-And we call this-PRIVATE PLACEMENT.

Next:
When the company uses the money generated from the IPO and comes back to declare profit, or even loss. At this point, we call it the SECONDARY MARKET.

NOTE:
Here, when the company especially declares profit, it now sell sits shares at a higher price than the IPO.

THE GOOD NEWS:
Price immediately after the IPO are not usually enormous.

HOWEVER:
It is more advised to buy from a company at IPO levels, cause by doing that, you are more on the RIGHT SIDE OF COMPOUNDING.

TIPS FOR IDENTIFYING THE BETTER COMPANIES TO INVEST IN

1. Get their real balance sheets for 20 years.
2. Make sure they have been consistently making profits in these years
3. Check out who are their members of board of directors and check out the business history of those people.
4. Look out for the products they sell. Is it an everyday consumable.
5. What is the market share and proposition of the company. Check out for more prospects and competition.
6. Don't be too conscious of revenue. Check out for profit.
7. What are the actions towards innovation
8. The personnel is the company. How is the level of quality of their personnel.
9. How strong is the brand of the company.
10. How strong is the capital base of this company.

NOTE: In my opinion, based on the strenght of the Naira. Invest in a company with a capital base not less than N100Billion. Forget networth please.


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