In this section, we will look at the fundamental aspect of stock
investing. Let’s compare Stock A with Stock B.
Which stock is cheaper? If your answer is Stock B , you need
investment lessons and you’ve come to the right place to learn
more about stock investing. As a stock investor, we don’t just look
at the stock price alone, we study the entire business of the stock
or the company that we are buying. For the above example, the
better choice would be Stock A, with lower PE ratio. However, PE
ratio is not the only criteria, please read on if you want to know
more.
How do we know which stock to buy?
I have come up with a simple acronym for you to follow: PRINCE
D
P stands for Price Earnings ratio, PE
R stands for Returns on Equity, ROE
I stands for Institutional support
N stands for Net Tangible Assets, NTA
C stands for Current Market Environmental Scan
E stands for Earnings per Share Growth
D stands for Dividend Yield
THE PRINCE D RULE
This is a simple criteria suitable for investors who have little or no
knowledge about stock investing. They are easy to follow. The
data can be obtained from our newspapers and the Bursa
Malaysia website at www.klse.com.my.
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| Tip #3 - The PRINCE D Strategy |
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