3 Methods to Select a Stock (Share)

There are three major steps that master investors take and they
are: 1) identify very good businesses, 2) buy them only at a huge
discount and 3) wait for the market to realize its true value or
overvalue it.

Step 1: Identify Very Good Businesses
Always remember that when you are buying a stock, you are not
buying a lottery ticket but you are buying part-ownership of a
company. If you want the value of your stock to increase over time,
you must identify and invest in very good businesses. Thus, you
must truly understand the business behind the stock. All master
investors invest from a business perspective.

What is a very good business? It is one where we can predict with
confidence that, over the long-term, it’s annual earnings and hence
stock value will increase (if a company can make increasingly
higher profits in the future, it would become…