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Today i’m gonna show you guys exactly how to find a great stock to invest in in 99 minutes or less 99 minutes or less i’m going to show you guys exactly the process you want to go through i hope you guys get a ton of value out of this video today hit a thumbs up if you do if you’re new to the stock market make sure after this video is over you check out my 11-part
Stock market investing mastery course that will help out you beginners a ton if you’re an advanced investor check out my membership group you will want to join that so let’s get into this guys let’s talk about this okay so the first thing is a spark there’s gonna be an idea that’s gonna be a spark behind something for you to even look into an investment okay so let’s
Say i don’t know maybe you’re walking in walmart okay you’re walking in walmart and you see man these knee braces are flying off the shelves look at this people are buying these knee braces like crazy what is this you’re looking at the product like well looks pretty cool you look on the back of the package and it says made by abc company okay great you’re like dude
I gotta look into that i gotta see if this is a public company i can invest in this is looked awesome okay great maybe you were surfing online and you saw product maybe you’re watching a cnbc or bloomberg or something maybe you were surfing the internet and seeking out for another website or stock track or whatever you saw such-and-such stock and you’re like i want
To look into that who knows where the idea can come from maybe it’s a stock i mentioned on this channel whatever the idea comes it’s got to have a spark okay so you get an idea and then you want to google if it’s a public company okay if it’s a stock i talk about they’re all pretty much public companies if it’s a cnbc or bloomberg they’re talking about something
Is more unlikely a public company if it’s something you randomly heard from a friend or a product you saw online or a product you saw on store or something or service you heard about then you want to google if it’s a public company so literally just google abc company is it public or something like that the results will pretty much come up there google’s so good
Now and if it is i’ll show you like a stock ticker and things like that okay if it’s not which is gonna be the majority companies you’ll probably look into or not even public companies your your search engines there it’s done okay so you spent like a whole like two minutes on that or less than two minutes right you had your idea you quick google it right there on
Your phone or whatever and you found out it wasn’t a public company well let’s say it is a public company awesome so if it’s a public company that means you can act you invest in it as long as you have a brokerage account that has money in there in it that you can buy actually buy a share of it okay so awesome it’s a public company so then what you want to do is
You want to google the investor relations page okay so you’re just gonna go to google and you type in abc company investor relations okay and that page will be generally the very first bar up there you click on that okay so great now you’re on their investor relations website then what you’re going to want to go to is you want to go to the 10k or otherwise known as
The annual report this is the most important thing for you to look at pretty much any piece of information but 75% of the information you really need to understand a stock you need to know about that company seventy five percent of the work is done in the annual report that 10k guys so that is by far the most vital thing you can ever look at over everything else
We’re going to talk about here okay the 10k annual report it’s going to be rate they’re listed probably under reports or filings or something like that under one of those tabs okay so then you want to read all about the company now not usually heard me i didn’t want to say anything about the financials or anything like that which is all located in that 10k and an
Annual report you don’t want to look at any of that you want to just read about the company you want to read that company profile you just want to read everything that’s going on with the business okay and that’s all you want to focus on at this particular time okay now if you’ve read through all that and you don’t have any clue still what their business is about
You should probably not even mess with that okay probably read through it maybe once or twice more if you still don’t get it you’ve been reading about this company for 20-30 minutes now and it’s just like you you’re not getting it at all you don’t really understand their business model you don’t really understand this business right then give up on it it’s not the
One for you because you never want to invest in something that you’re super confused about if you read about us several times now and you’re like dude i still don’t get this business model i don’t get how they’re gonna make money from this i don’t understand this product they don’t mess with it man there’s so many companies to invest in out there it’s not worth
Investing in a company you do not fully understand it’s just a huge mistake that so many investors make and every time they make that mistake and the company goes down they usually sell for a huge loss guys it generally always happens unfortunately because if you don’t understand the business you don’t understand the underlying company how can you have faith in it
You can’t you can’t have faith in it if you do not really understand that business guys so give up on it if you’ve read through it a couple times users don’t understand it like it’s not for you man there’s so many other stocks out there there’s thousands and thousands of public companies like this doesn’t need to be the only one okay the one that you don’t understand
Just don’t mess with that at that point but let’s say you do understand it you understand that business model you understand how they make products and all those kinds of things awesome now we ignore into the next step which is the balance sheet okay the balance sheet there’s a lot that goes into it but the main thing you want to look at is you want to look at the
Cash and investments versus the debt you want to make sure they got way more in cash and investments than they do debt if that company is loaded up on debt and they don’t have much cash and investments don’t go on from there just just that one’s not for you either okay the company’s loaded up on debts they have hardly any cash or investments just don’t mess with
It the reason being is a company and go out of business like like if they also have some hard times some happens in the economy what’s gonna get them through maybe they take out a loan but think about this if the economy went bad and that’s why their business went down who the hell’s loaning money no one’s loaning money if the economy’s bad if they’re loaded up on
Debt they’re going out of business guys they’re going out of business the white knight is not gonna somehow save them okay unless there’s some kind of great company okay the warren buffett is not gonna come save that company he might say bank of america but he’s not gonna come save abc company the knee patch company okay this so just realize if you’re messing with
The bad balance sheet you’re putting yourself at a huge risk there so do not do that so but let’s say the balance sheets great they’ve got tons of cash tons and investments very little debt phenomenal okay let’s go on the next step or the revenues and on the profits going up look at the last three years three years specifically five years and i really care about
10 years i for sure don’t care about it okay it’s fun to look at but as far as me generating investment three years as all i care about okay how are those revenues trending how are those profits trending if it’s an upward trajectory if everything’s getting better and better then we can go on to the next step if all sudden they were they had you know 200 million
Dollars in last year or 200 million dollars in profit two years ago in this past year they only did 75 million that’s a big turn-off you should not mess with that company they’ve always they are they obviously have something going wrong there you should not mess with that guys so now however if you’re an experienced investor you can get over this hurdle okay
Because then you need to start judging stock prices and things like that in and does the valuation match up maybe that stocks been down 75 percent since that time maybe it’s worth it but if you’re a newer investor if the profits and the revenues aren’t going up don’t mess with that stock okay that’s for more experienced investors who can judge in a lot more detail
And who can see trends going when you’re a beginner investor you can’t really see a trend coming it’s it’s so hard when you’re a beginner because you’ve hardly been around you don’t know the game yet but if you’ve been around for 5 10 15 20 years you can see the way things will trend in the future and you can know although that company’s gonna make a comeback here
Because they got such-and-such coming out and that could raise their revenues by 20 30 percent and this will raise profits and even on all those kinds of things but if you’re a beginner and those revenues and profits are trending the wrong way they’re going down don’t mess with it man it’s not the one for you that’s you know at that point you just you get out of
It but let’s say those revenues and profits are going up awesome ok so then you need to read the risk factor section there’s a risk factor section all 10 cased annual reports ok risk factors this is huge guys this is absolutely monumental so many people just skip over the risk factors like you know who cares it’s not important it’s like dude you’ve got to read
The risk factors it is so key it’s so key the reason being is those risk factors those are all written by the board of directors ceos and lawyers right and they want to make sure their ass is covered on the backside ok so if something goes wrong with their business they say well we had in the risk factors that was a risk factor in there that such and such company we
Were competitive with them and they could take us out or something guys read those risk factors if org you ibly the most important thing to read about the entire company and other than understand that what the company is like the next most important thing is understanding all the risks all the things that could go wrong and it’s going to be a ton of them laid out
There there’s usually at least 15 if not 20 or 30 risk factors written and then we fully explained their hey this could happen you know currency could change this way you know such and such company they launched a similar service last year and it’s under it’s under priced compared to what we offer that may cause us to lower our product pricing in the future which
May hurt gross margins and profits all those kinds of things guys gotta read those risk factors it is it’s like the golden thing for an investor that way you can get an idea of of where the business is trending how do they really have all these risks and how real of those risk it’s gonna be a lot easier for you judge you don’t just want to see it one way you’ve
Got to see it both ways because if you see just one way you only see the golden goose then you’re gonna end up with you know the dead goose that’s all i have to say guys so make sure you read those risk factors let’s say you read those you feel comfortable with those risk factors you understand them and everything awesome we can go on to the next part which is then
You want to leave read the latest ten queue okay the ten q differs from a 10k because a 10 q that’s gonna talk all about the latest quarter okay it’s gonna talk all about what happened in the latest quarter the reason you want to look into this is you want to see how the business is trending in the short term or things all good things all sent go bad really bad
Recently like did also you know they were growing 20% last year but also now they’re actually going down 20% how is the business trending rate now you want to know did they update guidance you know maybe also and they took down guidance and they’re like wow the business has changed bad right now all the kind of things you’ve got to read that 10k because excuse me
10 q because you know it’s great to know what they did last year okay and whether what the business has and everything but if things all of a sudden just started faltering bad right now then you just want to stay away from that as a beginner if you’re an advanced investor you may be able to get past that because you can look into different things and see trends
In some of that stuff like we talked about with the revenues and profits but if you’re a beginner if also in the business went from good to bad really fast that’s not the one for you either that’s not the one for you that’s just you know not the right company okay so let’s say the ten q’s great it looks like it’s matching up with the 10k you know everything is you
Know on up and up awesome now go ahead and google news okay so what you want to do is you want type in that company’s name click news on google and look at pages and pages of news okay probably three four pages go down there and just trying to find any news so abc company you know what’s the news on it and you just look at the list oh there’s been a huge lawsuit
That just came out somebody you know had the knee brace on and it broke into pieces and one of them went through their heart another person suing for five hundred million dollars or whatever guys looking at all that is there some bad publicity to come out did some good publicity come out did they just come out with a new product or service that was in the news
All those kinds of things guys that’s what you’re looking for in that news there so make sure your google news it that will give you an update on where the companies out at that exact moment the same way a 10-q well so that is phenomenal to do then you kind of want to see is its forward p/e the price to earnings ratio is it that a fair valuation okay you’re gonna
Usually find p/e ratios on many sites yeah who financed cnn money probably cnbc probably bloomberg things like that okay you really want to look at the forward p not so much the ttm which is a trailing 12-month pe you really want to look at the forward p/e okay and you want to see is it a fair is it a fair for where the growth is going so for instance the market
Rate now is trading somewhere around i think of twenty five to twenty six current p or trailing 12-month pe right however on a for pe basis were somewhere around i think a twenty one right now right so let’s say this company was hardly growing or growing very small well you’d probably want to get it for somewhere around twenty one pe if it was trading out a forty
One pe and it was hardly growing probably way overvalued right however let’s say it’s growing super fast it’s growing revenues and profits twenty thirty percent right now then maybe it’s at a twenty eight pe or thirty-two pe or something maybe that’s more of a fair value because it’s growing so fast so it’s up to you for you to judge you know how far out there is
That pe based upon the growth you know maybe the company’s growing seventy five percent right now on the revenues and profits side right so maybe it’s at a hundred and twenty pe maybe that’s fair though because it’s got such a parabolic growth that’s up for you to judge but it’s a hard thing that’s why it’s hard for me as i’m a growth investor but i’m also a value
Investor so it’s very hard for me to pay a hundred and twenty pe for a company or hundred or some of these companies trade for hunt you know 500 pe thousand pe it’s hard for me to do that sometimes unless i really see a turn coming with that profitability within the next couple years but you just got a judge that for yourself is this somewhat realistic if it’s
Not then you shouldn’t be messing with it man but let’s say it is fair pe then yeah you have found yourself a great stock to invest him you have found yourself a great stock guy so that’s what you want to do there just to kind of recap you know make sure you understand the company fully make sure that balance sheet is good make sure of revenues and profits are
Going up make sure you understand all the risks factors that could happen with that stock make sure you read the latest nq google news everything is that a fair pe if it is man you’ve found yourself a good stock to invest in and like i said the chances you’re gonna find all these things in a stock probably pretty slim to be honest usually you’re gonna have one
That falters here they’re just like the most key ones that you don’t even want to mess with even if you’re advanced investor in my opinion i don’t care how much experience you have should never mess with the company you don’t fully understand you should never ever mess with the company that has a horrible balance sheet those are just two things i don’t care how
Much experience you have i don’t care how much money you’ve made from the stock market don’t care what kind of games you’ve made okay just don’t mess with companies you don’t fully understand just don’t mess with a bad balance sheet ever that’s just a bad decision guys i don’t care what level experience you have and especially if you’re a beginner man that’s just
A big no-no there so i hope you guys enjoy this today how to find a great stock in 99 minutes hit thumbs up if you did make sure you check out my 11-part stock market mastery course if you’re a beginner down there that will help you guys up tremendously thank you for watching guys and have a great day
Transcribed from video
How to Find a Great Stock in 99 Minutes! By Financial Education
