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My friends term me one of the most "kia-see" / conservative investors ever.Indeed, I would rather miss an opportunity than to dip my toes into uncharted waters.
Warren Buffett compared investing to baseball: To be a great investor, he only had to wait for the right opportunity.
In this post, I am sharing my personal checklist that I used to run the rule over any stock. A stock only becomes interesting when most, if not all, of the criteria are met.
My Checklist
(1) Cheap Earnings - P/E < 15 times
- Remember to strip out non-recurring one-time gains from earnings per share.
- P/E of 15 times approx. 6.7% earnings yield, any lower means dividend payout ratio could be unsustainable. I wouldn't expect a company to maintain a 10% dividend yield on 5% earnings yield.
(2) Cheap Assets - P/B < 1
- The idea is simple. ...
