The Canadian Investor
8 Red Flags When Analyzing a Stock
Feb 19, 2024
Learn about 8 red flags when analyzing stocks, from declining revenues to unsustainable payout ratios. Discover why less can be more in terms of holdings. Explore the importance of monitoring red flags in stock analysis, including debt ratios and management's track record. Dive into the challenges of analyzing complex businesses like pharmaceuticals and Brookfield. Understand the significance of percentages in stock calculations and budgeting perspectives.
49:13
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Quick takeaways
- Identify warning signs like declining revenues for potential investment risks.
- Check a company's payout ratio to ensure sustainable dividend payments for long-term investment success.
Deep dives
Importance of Knowing What You Don't Like in Investments
Knowing what you don't like is essential when making investment decisions. Just like when finding a job or a romantic partner, understanding what doesn't align with your values and preferences can help guide your choices. These red flags, whether it's declining revenue over multiple years or high dividend yields, can serve as warning signs that a company may not be a good investment option. By paying attention to these red flags, you can save time and narrow down your choices to companies that align with your criteria and have the potential for long-term success.
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