How To Select & Pick Stocks

Author

Darold Trinh
March 04, 2024

Happy Monday,

It is Darold from Long Wealth Capital.

In today’s newsletter we will go over:

  • The undervalued stock pick for the week

  • What I’m looking for before I invest into a stock

  • And much, much, more..

Undervalued Stock Pick Of The Week

My stock pick of the week is Tesla. There has been a strong pullback of at least 20%.

Although Tesla continues to dominate marking a 38% growth and asserting its lead in the EV market.

In 2024, they project taking the number of cars to 2.2 - 2.3 million units. That reflects a 20% year over year growth.

  • How To Find Undervalued Stocks (link)

  • How A Full-Time Mom Went From Losing Money Doing Options To Making Money Consistently Every Month (link)

  • How To Find Undervalued Stocks Guide(link)

Deep Dive

In today’s deep dive I will be talking about what I look for in a company before I invest.

I get this question all of the time from my private students and its "How do I select stocks?”

So I’ll try to cover as much as possible in this email.

First off, I only select companies within the S&P500.

Why? Because these are companies that I don’t for see going anywhere.

If the stock market were to close for 100 years, these companies would still be here.

So now that I have narrowed it down to companies within the S&P500.

I go through these specific questions before I invest:

  1. Are they simple and predictable business?

  2. Do they have tons of free cash flow?

  3. Do they have a dominant market position (MOAT)?

  4. Does it have a hard barrier to entry in their market?

  5. Do they have a high return on capital?

  6. Do they have limited exposure to risk?

  7. Do they have a strong balance sheet?

  8. Do they have excellent management and governance?

If you can answer a majority of these questions positively, I would say that you have a good company to invest in.

Enjoy.

Darold

P.S. If you want a more in-depth explanation on this, here’s the link to the full video.

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