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PART II: STOCK RESEARCH CHECKLIST

PART II: STOCK RESEARCH CHECKLIST

Another main task for investors involves researching the prospective company thoroughly, examining all the aspects of the business, and then deciding what to do with the stock: Buy it, put it on hold for monitoring, or outright reject it.

There are more than 5,000 stocks in the United States alone; if you consider the stocks around the whole world, the numbers are staggering. Investors cannot research each and every stock extensively. Even professional investors cannot do that. Investors need to have a circle of competence and select the companies in those industries. Circle competence is important for many reasons, which will be explained in a later chapter. You should reject companies that are out of your circle of competence. As an investor, you will not be in a position to analyze each and every company in the United States and all around the world. But, you can try to learn each industry slowly and expand your circle of competence.


  

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