Besides educating yourself, the best way to
find undervalued investment is to have lots of investing idea.
Having investing idea allows you to compare investment
alternatives and pick the best one.
People sometimes lament that they seldom find
stocks that fill the criteria as undervalued. How can you find a
0% growth stock at a P/E of 13.4? A lot of companies are trading
at a P/E of 20 or more. How can you find companies that have
positive net cash? Lots of companies have more debt than they have
cash.
All of the above is true. Most companies do not
trade at undervalued territories. A lot of them also incur a lot
of debt and their balance has a negative net cash balance. And
that is why you will be rewarded when you can find undervalued
stocks. Think about it. If a 0 % growth stock is traded at a P/E
of 10 and its fair P/E value is 13.4. This is a 34% potential
return.
To get that kind of potential return, investors
need to sort out good companies from the bad and be more selective
in buying a stock. This is where investing idea comes into place.
When you receive plenty of investing idea, you can be more
selective in buying the common stock. So, where can you find
investing idea?
Investing
Idea