7 Things To Do Before You Buy A Stock

When I started investing I was about 19 years old and I started with 10,000, I knew just enough to be dangerous, the odds were probably 20-80 against me, but I got lucky and experiences that 20% of good luck. I bought 5 stocks, 3 of them did okay, 1 did terrible and another one did great, which means overall I made a made a profit.

The problem with a lot of us first time investors is that we think investing is putting all your money into one stock, and hopefully that stock turns into apple. But the truth is, we want to put our money into multiple with the potential to earn us a good return and to buy it them at good price. I’m not talking about index funds.

So in this video, I’m going to tell you 7 things to ask before you buy a stock, this information comes from one of my favorite investors, Peter Lynch a man turned down 15M a year to do nothing because he made so much money.

😎Call Me😎: https://bit.ly/30IBr0i

😎Second Channel😎: https://bit.ly/3c4sVPS

👨🏽‍💻Financial Freedom Course👨🏽‍💻$100 OFF CODE: LONGTERM
Link: https://longtermteam.teachable.com/p/financial-freedom-steps-from-nothing-to-freedom

💰MY M1 FINANCE PORTFOLIO💰 PLUS $10
Link: https://m1.finance/37SHd4241z-N

1. What does the Company do ( Services, Product, and customers )

For example a lot of people think that amazon is just a good retailer right

But amazon is really big into web services, their amazon prime memberships gets them a bunch of income and making their own products is a big deal

The founder of amazon jeff Bezos, he just wanted to make a lot of money to go to space ( that’s a real fact )

Basically: you can find all this information by doing research and checking the 10k form on the SEC website is just annual report of the company

2. How is the financial health of the company

Here is a simple example, I have a friend, she is beautiful, and she looks like she walks out of Gucci every day, everything she owns is the latest and greatest

However I was going over her NetWorth and it turns out she has a negative NetWorth

And she spends more money than she makes

For a company: this is the balance sheet, it shows what the company owns and the owes

3. What is the Earning Trend

-I like to study earnings between 5-7 years or 10 better

-If I see one company that has a downward trend that’s a red flag

-If I see a company that’s slowly but surely increase earnings then that’s a flag

4. How much is the company worth

This is easy, how much cash will the business make from the money the owners invested into the company after paying for all business expenses and business maintenance cap ex ( free cash flow )

For a company: they call this calculation intrinsic value, its to know how much the company is going to make you off your money and it makes sense for you own it

5. What protects this company

-Why do you think you can’t make a phone with Peach in the back and sell it just as well

-Or a shoe with an x

-Or a drink with called tommy cola and sell it

Find out what protects the company: it might be size, might be brand, might legislation

6. does the company do with the extra money it makes

-For example some company make billions of dollars

-They give that money to shareholder as a dividend, some don’t give a dividend and reinvest it back into the business and some buy back shares

-You have to find out as investor, if the company is using the money in the best way

7. Do you like the company

-Its easier to hold on to a company that you like

-Than it is to hold on to on that you don’t like

-But this is subjective because if I find $1 selling 40cent whether I like it or not, I’ll pick it up

* PRO TIP*
INFORMATION IS EVERYTHING
💲1 on 1 Talk + My Budget + Stock Investments💲
https://www.patreon.com/tommybryson

👕Merch👕
https://teespring.com/stores/tommybryson

✅2 FREE AUDIOBOOKS✅
https://amzn.to/2Enayo8¬¬¬

💰M1 FINANCE $10💰
https://m1.finance/37SHd4241z-N

🎁ACORN FREE $5🎁
Link: https://acorns.com/invite/38EYSU

⚡FREE KINDLE UNLIMITED⚡ (traditional reading)
Link: https://amzn.to/2VGbxt9

👨🏽‍💻DISCORD PRIVATE GROUP👨🏽‍💻
https://discord.gg/EcZEHpA

My Camera Gear: https://www.amazon.com/shop/tommybryson

✔ Help Us Reach 500,000 Subscribers: https://goo.gl/0wvm6w

😎All My Social Media😎
Link: https://linktr.ee/tommybryson

*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

source