Day 5: Journey to wealth creation and humble life | Listen to Podcasts | x to 1000x

I have almost completed reading the articles written by Dr. Vijay Malik. I have consumed the content and now have a fair understanding of what to do with the screener. I have yet to try it out on real stocks, analyze them using the concepts learned, and then actually buy stocks with real money. I hope to do this in July 2024.

I go to the office 3 days a week. Hence, I have been spending about 2 hours every day listening to podcasts of people who have earned from the stock market. Every bit of good information is useful as I feel I am still a newbie in this field.

A few of the concepts I have learned and need to implement are as follows.

1. Sales growth of a company is at least 15-20% CAGR.

   1. In parallel, the sales growth is also enabling profit growth. This ensures sales growth is bringing in more profits.

   2. When the sales growth is compared with peers, its growth is relatively higher.

2. There has been an increase in production capacity and sales volume, not just an increase in the price of the product/services. There should also be a gradual increase in the price of the product.

3. The profits generated should be received as cash. Cash is king. EPS could be 10 INR, but the actual cash received should be properly calculated.

4. Eventually, the profits should be shared with the shareholders.

ROE and ROCE aren't that important, but one can still analyze them. We are more interested in the EPS, then Cash flow, and most importantly, Free Cash Flow per Share (FCFF).

For a stock to have a moat, it should have a good SSGR. Calculate the SSGR before investing in the shortlisted stock.

One final important section an investor should read is "related party transactions." This discloses any miscreants doing nasty stuff in the business, like taking away profits for personal gains.