During stock evaluation, keep in mind things you
use regularly. You want to go with what your gut is telling you. Once you look
at the numbers and find a company that looks good, think about whether or not
you would actually buy what they’re selling. If you decide that you wouldn’t,
maybe you should invest in another company. At least you’ll know whether or not
you can accurately judge a company.
Stocks with slightly above average growth rates
are favorable. Stocks with growth slightly above average have more accurate
valuations and tend to generate the types of returns expected. Excessively
high-growth stocks become overpriced and their valuations don’t reflect the
actual returns that you will probably see.
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