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Equity Investing Rules Book

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Here are some of the fundamental analysis rules that help you identify / filter stocks.

  • Rule #4: Start your stock selection from the biggest stock in the market to the lowest stock in the market.
  • Rule #5: Prefer companies that have more pros and preferably no cons (screener)
  • Rule #6: Prefer consistently *profit making companies*. Look for companies that make profits (in particular operating profit, profit before tax and net profit)
  • Rule #16: Check Historical Data before beginning to invest
  • Rule #22: Keep regularly investing in your chosen list of shares at all times
  • Rule #25: Prefer stocks that are in F&O segment.
  • Rule #26: Prefer shares whose CMP is below its Book Value (BV)
  • Rule #27: Prefer companies with that are debt free or having meaningful liabilies
  • Rule #28: Understand promoter holding of the company before investing
  • Rule #31: Avoid investing in T-group company shares till they are moved to its parent group
  • Rule #33: Prefer companies with Piotroski F-Score above 6
  • Rule #34: Prefer companies with Modified C-Score less than 2
  • Rule #35: Invest in a company when macro factors support the company / industry.
  • Rule #37: Keep an eye on who is buying / selling shares in the Block Deals and Bulk deals
  • Rule #38: Invest in companies that have good ROE and ROCE (compared to its sectoral peers)
  • Rule #39: Invest in companies whose earnings growth is more than the share price difference in the past 1-year
  • Rule #40: Invest in companies that are backed by good promoters and management
  • Rule #41: Keep an eye on the Alpha of your portfolio to find if your pf is under-performing or over-performing to the stock market.