Long Term Share Investing Technique (International Edition)

Analyze a company's business model to assess profitability and growth, weighing competitive advantages, recurring versus non-recurring income, pricing, scalability, and industry considerations for long-term investing.

Classify companies as income or growth for long-term investing; focus on income stocks like banks, telecoms, and transport with stable income and dividends.

Identify growth stocks by focusing on companies with rising earnings and scalable business models, including commodities, healthcare pricing power, and future-ready technologies like new products and e-commerce services.

Align your 3–5 year horizon by choosing between income and growth stocks; income stocks offer steady dividends with lower risk, while growth stocks target higher gains with greater risk.

Explore how the balance sheet captures a company's financial snapshot, detailing assets, liabilities, and equity, with current and non-current classifications, and the equation assets equal liabilities plus equity.

Learn how a profit and loss statement shows past year's revenue, costs, and profits, explains noncash items, and contrasts accounting profit with cash profit.

Dispel the difference between accounting profit and cash profit by examining the cash flow statement. Learn how operating, investing, and financing activities determine net cash and year-end cash balance.

Analyze financial statements to determine a company's health and its cash profitability. Evaluate profitability ratios by examining five-year profit patterns, cash flow, net profit margin, ROIC, and ROE.

Analyze liquidity ratios, with the current ratio as the key gauge of operation next year. Use quick and cash ratios as conservative checks of short-term obligations.

Analyze solvency by using the balance sheet to compute equity ratio, debt-to-equity, and interest coverage, illustrating a debt-to-equity of about 4.1x and an interest coverage of about 23x.

Use six tests to judge a stock's health: positive five-year profits, positive operating cash, >5% profit margin, low equity ratio, and interest coverage >3; review annual reports and chairman's statement.

Explore pricing analysis through fundamental analysis to determine a stock's fair value. Learn to compare intrinsic and comparative value against market price, emphasizing long-term investing.

Discover how discounted cash flow converts future cash flows into present value using a required return, revealing intrinsic value and guiding stock versus market price decisions.

Apply the price-earnings ratio to assess whether a stock is expensive, compare fair value to market price, and use earnings per share, peers, and benchmarks to guide investments.

Use the price to book value ratio, dividing price by book value per share (net asset value from assets minus liabilities), mainly for finance, real estate, and asset-heavy firms.

Assess dividend yield by comparing regular dividends to price, and evaluate intrinsic value against peers using price-to-book and other ratios, while weighing risk and stability.

Move from the stock analysis phase to portfolio management, applying economy analysis and portfolio strategies while consolidating business, financial statement analysis, pricing, and risk analysis.

Explore a mock economy, explaining how resources, money flow, government, financial markets, and trade create GDP through consumption, investment, taxes, and public goods.

Identify key economic indicators to gauge health, including unemployment rate, PMI, GDP growth, and government balance, plus the balance of trade; analyze US, China, and euro area trends.

Money supply—the total money in circulation—grows when banks lend beyond cash on hand via capital adequacy, influencing pricing and stock moves through quantitative easing.

Analyze how economic policies like stimulus, austerity, and interest rates shape growth, unemployment, and stock markets, enabling long-term investors to assess global economy and policy impacts.

Build a stock watchlist based on business quality, choose growth or income stocks, and diversify across at least 30 equities for a 3-5 year buy-and-hold strategy.

Learn when to sell and how to time exits within a long-term, buy-and-hold investing approach. Practice diversification, avoid chasing highs, and rebalance as market valuations and news shift.