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What is the best strategy for me to pick up the right stocks on the market?



The question that many of our clients or prospective clients ask is what is the best strategy for me to pick up the right stocks on the market. to an experienced investor this question might be a little bit naive. However, this question is definitely worth answering. Not only because so many people ask it but also because the answer is not an easy one. Let us first start by saying that there is no single answer to this question. And that is exactly what makes it interesting. Picking up the best Stocks has always been a difficult thing to do and unfortunately will still be in the future. there is unfortunately no easy formula to follow to make the right decisions. of course, Benjamin Graham has explained in his book that there might be a magic formula after all, but the reality is always more complex when it comes to trading stocks in real life. At a basic level, Benjamin Graham recommended investors to buy a portfolio of stocks with low price to earnings ratio. This is of course a summary of his recommendation and should not be used as such. The big problem with following a simple formula invest is that you are going to miss the complexity that the markets have. Recommending holding a portfolio of stocks with low price to earnings make sense. However, basing your strategy on only one factor will put you in trouble soon later. The reality is that a stock might have a low price to earnings ratio for good reasons. This might be for instance because the company does not have enough liquidity. This situation might end up into different scenarios. The good scenario for the investor would be that the company finally manage to handle the current difficulties and, in this case,, it is likely that at one point in the future at least the price to earnings will go up again and hopefully that you will make money. The other scenario which is the one that no investors like to think about is That the company might go bankrupt. This is important here to remember that as a stakeholder if the company you own (partly own) Go bankrupt, you will simply lose your whole investment in it.

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