Max Teh

Oct 17, 20233 min

Complete Guide To Create a Winning Stocks Portfolio To Achieve Your Financial Goals.

Updated: May 3

Table of Contents:

  1. Preface

  2. What you will get out of this guide?

  3. Complete guide to create a winning stocks portfolio to achieve your financial goals:

Disclaimer: This communication is provided for information purposes only and is not intended as a recommendation or a solicitation to buy, sell or hold any investment product. Readers are solely responsible for their own investment decisions.

Preface

This guide is the compilation of the checklists & process I have used to build an investment portfolio that consistently generated above average returns over time.

While countless guides and books claim to offer the secret to building a winning stock portfolio, many fall short in key areas:

  1. Lack of Transparency: Authors often withhold their own returns/ performance, making it difficult to gauge the effectiveness of their strategies.

  2. Information Gap: Crucial details, like where & how to access essential information for analysis, are frequently missing, leaving readers without practical guidance, only theoretical information.

  3. Goal-less Approach: Failing to emphasize the importance of starting with clear financial goals leaves readers without a personalized roadmap for success.

  4. Jargon Overload: Complex language and technical jargon can alienate new investors and hinder understanding.
     

This series of microblogs aims to bridge these gaps and empower you to build a portfolio that aligns with your individual aspirations. Here's what sets it apart:

  1. Transparency: I openly share my long-term portfolio performance, allowing you to learn from someone with demonstrably successful strategies.

  2. Actionable Insights: Each microblog provides clear examples and free online tools to help you apply the concepts to real-world stock analysis.

  3. Goal-Oriented Framework: We begin by establishing your financial goals, then work back to build a tailored investment plan.

  4. Clear Communication: I prioritize simple, jargon-free explanations to ensure readers can grasp the key concepts.
     

What you will get out of this guide?

You will learn how to set your financial goals, understand valuation, various criteria for stock analysis, discover helpful free tools, and discover stocks with high growth potentials while mitigating the downside risks of your portfolio.

Remember, this series empowers you to make informed decisions based on your unique financial journey. Feel free to adapt these strategies to your specific needs and you'll gain the knowledge and confidence to navigate the investment landscape and achieve your financial goals.

Complete guide to create a winning stocks portfolio to achieve your financial goals:
 

  1. Identify:

    1. Amount you need to reach your financial goals
       

    2. Amount you need to invest every month
             + Annual returns required
             + Number of years you need to do this for.
       

    3. Amount of stocks you need in your portfolio.
       

  2. Understanding:

    1. The importance of valuation

      1. Price to sale ratio
         

  3. Collating a list of stocks that may help you achieve your targetted annual returns

    1. Identify fast growing industries with high barriers of entry.

      1. Identify the companies with the best-rated products
         

  4. Implement elimination method for the list of collated companies to analyse

    1. Avoid companies with

      1. in Net Debt position

      2. Negative Shareholder Equity

      3. Negative Cashflows

      4. Low Revenue growth

      5. Founders & C-lvl execs selling their stocks

      6. PS ratio above 21x

      7. Short interest ratio above 10
         

  5. Favour companies which:

    1. are led by Founder-CEO/ Key-Persons, who:

      1. have successful track records & relevant experiences

      2. are preferably young

      3. preferably own a significant stake in their company

      4. are passionate.
         

    2. are listed for less than 10 years.
       

    3. have successful Marketing Funnels:
       

      1. increasing Google search trends

      2. increasing Usage statistics

      3. increasing Organic web traffic

      4. increasing Social media followers & engagement rate

      5. positive Google Reviews

      6. positive Mobile App ratings
         

    4. have:

      1. steady and increasing Income

      2. increasing International sales

      3. increasing R&D expenses
         

      4. a strong Ecosystem of Products in place.
         

      5. Economic Moats.

      6. Switching Cost

      7. Network Effects

      8. Intangible Assets

      9. Low Cost of Production

      10. Efficient Scale
         

    5. which:

      1. PS ratios (on All-time high price) is below the Median PS ratio

      2. meets the Rule of 40 (R40)

      3. Revenue growth exceeds Industry's growth rate
         
         

  6. Mitigate downside risk by favouring Stocks with:

    1. minimal Antitrust Threats.

    2. Net Debt to Equity < 50%

    3. Quick Ratio > 1

    4. Current Ratios between 1.5 & 2.

    5. increasing Cash & Cash Equivalents.
       

  7. 🛠️ work in progress..
         check back again for more

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